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
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
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Working Paper: On the competitive effects of screening in procurement (2019)
Working Paper: On the Competitive Effects of Screening in Procurement (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:tiu:tiutil:78e45bf6-3a0a-46a0-9abd-78a8baa4e3ad
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