Joint bidding and horizontal subcontracting

Jan Bouckaert and Geert van Moer

Working Papers from University of Antwerp, Faculty of Business and Economics

Abstract: This paper investigates joint bidding when firms have incentives to sign subcontracts with each other after competing in the bidding stage. A bidding consortium affects the horizontal subcontracting market and, through backward induction, alters firms’ bids. Our findings challenge the current legal practice that consortia without efficiencies must pass the “no-solo-bidding test”, requiring that its members could not bid stand-alone. Our framework predicts that the formation of a temporary consortium, which has the feature that it dissolves after submitting a losing bid, benefits the procurer. The winning bid is more competitive with a temporary as compared to a structural consortium.

Keywords: Joint bidding; Horizontal subcontracting; buyer power (search for similar items in EconPapers)
JEL-codes: D43 L13 L14 L41 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2021-02
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://repository.uantwerpen.be/docstore/d:irua:4696 (application/pdf)

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Journal Article: Joint bidding and horizontal subcontracting (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ant:wpaper:2021001

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