Taking the Lab to the Field: Experimental Tests of Alternative Mechanisms to Procure Multiple Contracts

Anders Lunander and Jan-Eric Nilsson
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Jan-Eric Nilsson: Swedish National Road and Transport Research Institute and Department of Economics, Dalarna University

No 2003.28, Working Papers from Fondazione Eni Enrico Mattei

Abstract: The first part of the paper reports the results from a sequence of laboratory experiments comparing the bidding behavior for multiple contracts in three different sealed bid auction mechanisms; first-price simultaneous, first-price sequential and first-price combinatorial bidding. The design of the experiment is based on experiences from a public procurement auction of road markings in Sweden. Bidders are asymmetric in their cost functions; some exhibit decreasing average costs of winning more than one contract, whereas other bidders have increasing average cost functions. The combinatorial bidding mechanism is demonstrated to be most efficient. The second part of the paper describes how the lab experiment was followed up by a field test of a combinatorial procurement auction of road markings.

Keywords: Multiple units; non-constant costs; asymmetric redemption values; alternative procurement mechanisms (search for similar items in EconPapers)
JEL-codes: D44 L92 (search for similar items in EconPapers)
Date: 2003-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Taking the Lab to the Field: Experimental Tests of Alternative Mechanisms to Procure Multiple Contracts (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2003.28

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