6533b86efe1ef96bd12cc7f1
RESEARCH PRODUCT
Design of Public Procurement Auctions: Evidence from Cleaning Contracts
Sofia LundbergOtto ToivanenAri Hyytinensubject
TheoryofComputation_MISCELLANEOUSEconomics and Econometricssiivousalamedia_common.quotation_subject05 social sciencessiivouspalvelutTheoryofComputation_GENERALjulkiset hankinnatProcurement auctionsGeneralLiterature_MISCELLANEOUSMicroeconomicsRegime changepublic procurementsProcurement0502 economics and businessBeautykilpailutusComputingMilieux_COMPUTERSANDSOCIETYCommon value auctionauctionsBusiness050207 economicsIndustrial organization050205 econometrics media_commondescription
We analyze a regime change from beauty contests to first-price sealed-bid and scoring auctions, using Swedish data on public procurement of cleaning services. In beauty contests, the lowest bid often lost, leaving substantial money on the table. The procurement costs were similar before and after the regime change: (i) Entry strongly decreases the procurement cost but did not change. Entry would have decreased had the municipalities not adjusted the objects of auctions. (ii) Municipalities favored in-house suppliers in the old regime, leading to more aggressive bidding by others. With favoritism reduced, these changes balanced each other out. Peer reviewed
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2018-01-01 | SSRN Electronic Journal |