Entry barriers in public procurement: Evidence from conjoint survey experiment

Ari Hyytinen, Jan Jääskeläinen, Antti Sieppi, Vesa-Heikki Soini and Janne Tukiainen
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Ari Hyytinen: Hanken School of Economics and Helsinki GSE
Jan Jääskeläinen: Finnish Consumer and Competition Authority
Antti Sieppi: Finnish Consumer and Competition Authority
Vesa-Heikki Soini: Hanken School of Economics and University of Turku
Janne Tukiainen: Department of Economics, University of Turku

No 176, Discussion Papers from Aboa Centre for Economics

Abstract: Limited competition in public procurement remains a persistent concern, yet the reasons for low participation are not well understood. We conduct a conjoint survey experiment that targets both potential and actual bidders in Finland. We present real firms with hypothetical tender scenarios, randomly varying key attributes values, asking which tender they would enter. The time required to prepare a bid is the most significant entry barrier. Moreover, tenders evaluated solely on the lowest price, those involving cross-border participation, and higher expected competition reduce entry. Uncertainty over the number of competitors deters entry as much as for certain facing high competition.

Keywords: Entry; Conjoint Experiment; Public Procurement (search for similar items in EconPapers)
JEL-codes: C83 D44 H57 L22 (search for similar items in EconPapers)
Pages: 64
Date: 2026-02
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