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On the Competitive Effects of Screening in Procurement

Gyula Seres () and Adam Pigoń ()

No 2019-009, Discussion Paper from Tilburg University, Tilburg Law and Economic Center

Abstract: Procuring authorities frequently use screening in order to mitigate risky bids. This study estimates the effect of bid screening and litigation on entry and bidding using a unique data set on highway construction procurement auctions in Poland. The market exhibits a screening method that ex post selects eligible offers. We demonstrate with an empirical model that this method disproportionately affects small firms and creates a barrier to entry. Our results suggest that screening increases bids by two channels. First, it directly inflates bids as well as decreasing entry. Second, in a competitive market, lower entry also inflates bids and prices.

Keywords: procurement; auctions; market design; litigation (search for similar items in EconPapers)
JEL-codes: H57 D44 D47 L5 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-des and nep-ind
Date: 2019
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Related works:
Working Paper: On the competitive effects of screening in procurement (2019) Downloads
Working Paper: On the Competitive Effects of Screening in Procurement (2019) Downloads
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