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

Véronique Flambard, Pierre Lasserre and Pierre Mohnen

CIRANO Working Papers from CIRANO

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. It has succeeded in exploiting economies of scale while maintaining competition; and it was instrumental in promoting above Canadian average technological progress by its design of snow-removal territories. Par des méthodes non paramétriques adaptées de Guerre et al. [2000], nous évaluons la distribution des coûts et les rentes informationnelles correspondant à 666 contrats de déneigement mis aux enchères par la Ville de Montréal. Les résultats sont conformes à la théorie des enchères concurrentielles : corrélation positive entre soumissions et coûts; rentes croissantes avec la variance des coûts et décroissantes avec le nombre d'enchérisseurs. Tant les soumissions que les coûts diminuent au cours de la période, tandis que les rentes sont stables. Ces résultats sont à mettre au crédit de la Ville : elle a su exploiter les économies d'échelle sans réduire la concurrence, et susciter un progrès technologique plus élevé que la moyenne nationale grâce au découpage des territoires.

Keywords: procurement auction; nonparametric estimation; informational rents; task design; municipal contracts; enchères d'approvisionnement; estimation non paramétrique; rentes d'information; conception des tâches; contrats municipaux (search for similar items in EconPapers)
JEL-codes: D44 H40 (search for similar items in EconPapers)
Date: 2004-12-01
New Economics Papers: this item is included in nep-com, nep-pbe and nep-ure
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Downloads: (external link)
https://cirano.qc.ca/files/publications/2004s-59.pdf

Related works:
Journal Article: Snow removal auctions in Montreal: costs, informational rents, and procurement management (2007)
Working Paper: Snow Removal Auctions in Montreal: Costs, Informational Rents, and Procurement Management (2007)
Working Paper: Snow removal auctions in Montreal: costs, informational rents, and procurement management (2007)
Working Paper: Snow Removal Auctions in Montreal: Costs, Informational Rents, and Procurement Management (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:cir:cirwor:2004s-59

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