 Bidder asymmetries in procurement auctions: Efficiency vs. information – Evidence from railway passenger servicesChristoph Carnehl and Stefan Weiergraeber International Journal of Industrial Organization, 2023, vol. 87, issue C Abstract: We estimate a structural model of procurement auctions with private and common value components and asymmetric bidders using detailed contract-level data on the German market for railway passenger services. Exploiting exogenous variation in the procurement design, we disentangle the asymmetries in private costs from asymmetries in information about the common value. While each asymmetry can rationalize a firm’s dominance, understanding its source is crucial for evaluating the auction design as welfare and revenue implications depend on the source of dominance. Our results indicate that the incumbent is slightly more cost-efficient and has substantially more precise information about the common value component. If the bidders’ strategic response to the common value asymmetry were eliminated, the average probability of selecting the efficient firm would increase by 43%-points. Keywords: Procurement with asymmetric bidders; Incumbency advantages; Structural estimation of auctions; Railway passenger services (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:87:y:2023:i:c:s0167718722000777 DOI: 10.1016/j.ijindorg.2022.102902 Access Statistics for this article International Journal of Industrial Organization is currently edited by P. Bajari, B. Caillaud and N. Gandal More articles in International Journal of Industrial Organization from Elsevier |
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