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High And Low Bids In Tenders: Strategic Pricing And Other Bidding Behaviour In Public Tenders Of Passenger Railway Services

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  • Gunnar ALEXANDERSSON
  • Staffan HULTÉN

Abstract

ABSTRACT**: An important component in the deregulation of the public sector in the European Union is public procurement of services and products. This article studies the bidding behaviour of firms participating in public tenders of passenger railway services in Sweden. In a theoretical part of the article we discuss the various possible reasons behind high and low bids in tenders, linked to a discussion on pricing strategies and continuous and discontinuous economies of scale regarding costs of production. Detailed data on bids and bidders in Swedish tenders of railway services are then analyzed. 37 tenders taking place between 1989 and 2005 are included.

Suggested Citation

  • Gunnar ALEXANDERSSON & Staffan HULTÉN, 2007. "High And Low Bids In Tenders: Strategic Pricing And Other Bidding Behaviour In Public Tenders Of Passenger Railway Services," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 78(2), pages 161-194, June.
    • Handle: RePEc:bla:annpce:v:78:y:2007:i:2:p:161-194
    DOI: 10.1111/j.1467-8292.2007.00331.x
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    References listed on IDEAS

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    2. van der Hoek, M. Peter, 2008. "Local public procurement: how to deal with a creative bidder? A case study from the Netherlands," MPRA Paper 24280, University Library of Munich, Germany, revised 27 Oct 2009.

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