Asymmetry in Procurement Auctions: Evidence from Snow Removal Contracts

Véronique Flambard and Isabelle Perrigne
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Isabelle Perrigne: Penn State - Pennsylvania State University - Penn State System

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Abstract: Differences in cost efficiency and productivity across firms may introduce asymmetries in procurement auctions. Relying on a structural approach, this article investigates potential asymmetry among firms bidding for snow removal contracts in Montréal. The empirical results show that firms located in close proximity have a cost advantage relative to other firms in the most urbanised part of Montréal because of prohibitive equipment storage costs. The extent of inefficiency due to asymmetry is empirically assessed. Various policy experiments are performed. A bidding preference policy shows that the city could expect to reduce its costs for allocating snow removal contracts.

Keywords: Auction Theory; Econometrics of auctions (search for similar items in EconPapers)
Date: 2006-10-01
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Citations: View citations in EconPapers (2)

Published in The Economic Journal, 2006, 116 (514), pp.1014-1036. ⟨10.1111/j.1468-0297.2006.01121.x⟩

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Journal Article: Asymmetry in Procurement Auctions: Evidence from Snow Removal Contracts (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04507097

DOI: 10.1111/j.1468-0297.2006.01121.x

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