In government procurement auctions of construction contracts, entrants are typically less informed and bid more aggressively than incumbent firms. This bidding behavior makes them more susceptible to losses affecting their prospect of survival. In April of 2000, the Oklahoma Department of...

In procurement auctions, there are situations where a bidder's cost is uncertain at the time of bidding, leading to a "winner's curse." We use bridgework data from the State of Oklahoma and an empirical auction model to explore whether the winner's curse also affects entry, which can have...

We study the impact of an investigation into collusion and corruption to learn about the organization of cartels in public procurement auctions. Our focus is on Montreal's asphalt industry, where there have been allegations of bid rigging, market segmentation, complementary bidding and bribes to...

Abstract Public procurement data sets usually lack detailed data that are needed to implement existing methods of collusion detection. We design a method to identify and test for bid rigging in procurement auctions using limited information. The method can be applied to limited data sets using...

This paper investigates differences in the bidding patterns of entrants and incumbents. We examine a comprehensive data set of Utah construction procurement auctions during the years 1969-2003. The analysis suggests that entrants bid more aggressively than incumbents for most contractor types...

This paper contributes to the empirical literature on auctions and negotiations. Using healthcare facilities data on procurement contracts, I find evidence that auctions do not yield lower prices than negotiations. This result is robust to specifications tackling quality differences, endogenous...

We consider a budget-constrained mechanism designer who selects an optimal set of projects to maximize her utility. A project's cost is private information and its value for the designer may vary. In this allocation problem, the selection of projects - both which and how many - is endogenously...

We examine auction data to determine if bid rigging presents in procurement auctions for paving works in Ibaraki City, Osaka, Japan. We first show that sporadic bidding wars are caused by the participation of potential “outsiders.” Assuming that the ring is all-inclusive if the auction is...

Cost overrun is ubiquitous in public procurement. We argue that this can be the result of a constraint optimal award procedure when the procurer cannot commit not to renegotiate. If cost differences are more pronounced for more complex designs, it is optimal to fix a simple design ex ante and to...

This paper empirically investigates the effect of the competitive environment (number of participants) on the cost of procurement. We use a unique dataset provided by the Public Procurement Authority (PPA) of Turkey that covers all of the government procurement auctions for the years...