Do Combinatorial Procurement Auctions Lower Cost? - An Empirical Analysis of Public Procurement of Multiple Contracts

Anders Lunander () and Sofia Lundberg ()
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Anders Lunander: Swedish Business School, Postal: Department of Economics, Örebro University, SE - 702 82 Örebro, Sweden

No 825, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: Combinatorial procurement auctions enable suppliers to pass their potential cost synergies on to the procuring entity and may therefore lead to lower costs and enhance efficiency. However, bidders might find it profitable to inflate their stand-alone bids in order to favour their package bids. Using data from standard and combinatorial procurement auctions, we find that bids on individual contracts in simultaneous standard auctions without the option to submit package bids are significantly lower than the corresponding stand-alone bids in combinatorial auctions. Further, no significant difference in procurer’s cost as explained by auction format is found.

Keywords: Combinatorial procurement auctions; Contract bidding (search for similar items in EconPapers)
JEL-codes: D44 H57 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2011-04-20
New Economics Papers: this item is included in nep-cta
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Do Combinatorial Procurement Auctions Lower Cost? - An Empirical Analysis of Public Procurement of Multiple Contracts (2009)
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