Bidder Asymmetry in Infrastructure Procurement: Are There Any Fringe Bidders?

Asymmetric auctions are among the most rapidly growing areas in the auction literature. The potential benefits from intensified auction competition could be enormous in the public procurement context. Entrant bidders are considered a key to enhance competition and break potential collusive arrangeme...

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Bibliographic Details
Main Authors:	Estache, Antonio, Iimi, Atsushi
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Auctions D440 National Government Expenditures and Related Policies: Procurement H570 Electric Utilities L940 Gas Utilities Pipelines Water Utilities L950
Online Access:	http://hdl.handle.net/10986/5700

id	okr-10986-5700
recordtype	oai_dc
spelling	okr-10986-57002021-04-23T14:02:23Z Bidder Asymmetry in Infrastructure Procurement: Are There Any Fringe Bidders? Estache, Antonio Iimi, Atsushi Auctions D440 National Government Expenditures and Related Policies: Procurement H570 Electric Utilities L940 Gas Utilities Pipelines Water Utilities L950 Asymmetric auctions are among the most rapidly growing areas in the auction literature. The potential benefits from intensified auction competition could be enormous in the public procurement context. Entrant bidders are considered a key to enhance competition and break potential collusive arrangements among incumbent bidders. Asymmetric auction theory predicts that weak (fringe) bidders would bid more aggressively when they are faced with a strong (incumbent) opponent. Using data from official development projects, this paper shows that entrants actually submitted aggressive bids in the presence of incumbent(s) in the road sector and to a certain extent in the water sector. For electricity projects, the general competition effect is found to be particularly significant, but the entrant effect remains unclear. The results suggest that auctioneers should foster competition in public procurement, including fringe bidders, to contain public infrastructure investment costs. 2012-03-30T07:34:06Z 2012-03-30T07:34:06Z 2010 Journal Article Review of Industrial Organization 0889938X http://hdl.handle.net/10986/5700 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Auctions D440 National Government Expenditures and Related Policies: Procurement H570 Electric Utilities L940 Gas Utilities Pipelines Water Utilities L950
spellingShingle	Auctions D440 National Government Expenditures and Related Policies: Procurement H570 Electric Utilities L940 Gas Utilities Pipelines Water Utilities L950 Estache, Antonio Iimi, Atsushi Bidder Asymmetry in Infrastructure Procurement: Are There Any Fringe Bidders?
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	Asymmetric auctions are among the most rapidly growing areas in the auction literature. The potential benefits from intensified auction competition could be enormous in the public procurement context. Entrant bidders are considered a key to enhance competition and break potential collusive arrangements among incumbent bidders. Asymmetric auction theory predicts that weak (fringe) bidders would bid more aggressively when they are faced with a strong (incumbent) opponent. Using data from official development projects, this paper shows that entrants actually submitted aggressive bids in the presence of incumbent(s) in the road sector and to a certain extent in the water sector. For electricity projects, the general competition effect is found to be particularly significant, but the entrant effect remains unclear. The results suggest that auctioneers should foster competition in public procurement, including fringe bidders, to contain public infrastructure investment costs.
format	Journal Article
author	Estache, Antonio Iimi, Atsushi
author_facet	Estache, Antonio Iimi, Atsushi
author_sort	Estache, Antonio
title	Bidder Asymmetry in Infrastructure Procurement: Are There Any Fringe Bidders?
title_short	Bidder Asymmetry in Infrastructure Procurement: Are There Any Fringe Bidders?
title_full	Bidder Asymmetry in Infrastructure Procurement: Are There Any Fringe Bidders?
title_fullStr	Bidder Asymmetry in Infrastructure Procurement: Are There Any Fringe Bidders?
title_full_unstemmed	Bidder Asymmetry in Infrastructure Procurement: Are There Any Fringe Bidders?
title_sort	bidder asymmetry in infrastructure procurement: are there any fringe bidders?
publishDate	2012
url	http://hdl.handle.net/10986/5700
_version_	1764396003686875136

Bidder Asymmetry in Infrastructure Procurement: Are There Any Fringe Bidders?

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