Multidimensional Auctions for Public Energy Efficiency Projects: Evidence from Japanese Esco Market

Atsushi Iimi

Review of Industrial Organization, 2016, vol. 49, issue 3, No 5, 514 pages

Abstract: Abstract Competitive bidding is an important policy tool for governments to procure goods and services at the lowest possible cost in the market. Under the traditional public procurement system, however, it is difficult to purchase a highly customized object, such as energy efficiency services, because not only prices but also other nonmonetary aspects need to be taken into account. Multidimensional auctions are useful in such cases. The paper examines the cluster of characteristics of the winning bids of multidimensional auctions for public energy service company (ESCO) projects in Japan. As theory predicts, it is found that the competition effect is significant. Other institutional aspects—such as preannouncement of an energy savings target—are also found important to promote energy efficiency. The results also indicate that the public sector should absorb the regulatory and institutional risks that are related to ESCO projects.

Keywords: Multidimensional auction; Energy efficiency; Risk sharing (search for similar items in EconPapers)
JEL-codes: C36 D44 D82 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s11151-016-9510-7

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