Snow Removal Auctions in Montreal: Costs, Informational Rents, and Procurement Management

Véronique Flambard (), Pierre Lasserre () and Pierre Mohnen ()

No 20-05, Cahiers de recherche du Département des sciences économiques, UQAM from Université du Québec à Montréal, Département des sciences économiques

Abstract: Using nonparametric estimation techniques adapted from Guerre et al. [2000], we infer cost distributions and informational rents, from 666 snow removal contracts offered for tender by the City of Montreal. Our results are compatible with standard received theory of competitive auctions: there is a positive correlation between costs and bids; rents increase with the variance of costs and decrease with the number of bidders. Bids and costs have decreased over the sample period, while informational rents remained stable. The City deserves credit for these results, as it has succeeded in exploiting economies of scale while maintaining competition.

Keywords: Procurement auction; nonparametric estimation; informational rents; task design; municipal contracts (search for similar items in EconPapers)
JEL-codes: D44 H40 (search for similar items in EconPapers)
Date: Written 2001-02
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Related works:
Working Paper: Snow Removal Auctions in Montreal: Costs, Informational Rents, and Procurement Management (2004)
Working Paper: Snow Removal Auctions in Montreal: Costs, Informational Rents, and Procurement Management (2004)
Journal Article: Snow removal auctions in Montreal: costs, informational rents, and procurement management (2007)
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