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Do E-Auctions Realy Improve the Efficiency of Public Procurement? The Case of the Slovak Municipalities

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  • Jan Pavel
  • Emilia Sičáková-Beblavá

Abstract

The article deals with the factors which influence efficiency of public procurement in the competitive contracting conducted through e-auctions in 15 Slovak cities. Data cover building and IT contracts awarded in the years 2007-2009. Together 186 observations were used for the analysis. The article starts with a theoretical discussion on the factors influencing efficiency of the procurement including potential impacts of the e-procurement and the e-auction. Than five hypotheses are formulated and the set of data is described. The next part introduces results of the regression analyses. It shows indirect proportion of the relation between the number of the submitted bids and the winning price. Each additional bid brings decrease of the price by approximately 3.4% of the expected price. The use of the e-auctions is connected with an increase of the number of the submitted bids by 0.7, which mean an average decrease of the winning price by approximately 2.4% of the expected price. The article concludes that the application of the e-auctions brings an indirect impact on the winning price. The reason is that it is more transparent than ""standard"" tenders. It probably affects the trust of bidders and increases of their number.

Suggested Citation

  • Jan Pavel & Emilia Sičáková-Beblavá, 2013. "Do E-Auctions Realy Improve the Efficiency of Public Procurement? The Case of the Slovak Municipalities," Prague Economic Papers, Prague University of Economics and Business, vol. 2013(1), pages 111-124.
    • Handle: RePEc:prg:jnlpep:v:2013:y:2013:i:1:id:443:p:111-124
    DOI: 10.18267/j.pep.443
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    References listed on IDEAS

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    1. Lengwiler, Yvan & Wolfstetter, Elmar, 2000. "Auctions and corruption," SFB 373 Discussion Papers 2000,40, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    2. AndréS GóMez-Lobo & Stefan Szymanski, 2001. "A Law of Large Numbers: Bidding and Compulsory Competitive Tendering for Refuse Collection Contracts," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 18(1), pages 105-113, February.
    3. Brannman, Lance & Klein, J Douglass & Weiss, Leonard W, 1987. "The Price Effects of Increased Competition in Auction Markets," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 24-32, February.
    4. Atsushi Iimi, 2006. "Auction Reforms for Effective Official Development Assistance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 28(2), pages 109-128, March.
    5. Oriana Bandiera & Andrea Prat & Tommaso Valletti, 2009. "Active and Passive Waste in Government Spending: Evidence from a Policy Experiment," American Economic Review, American Economic Association, vol. 99(4), pages 1278-1308, September.
    6. Jan Pavel, 2010. "Analýza vlivu míry konkurence na cenu rozsáhlých staveb dopravní infrastruktury [The Analysis of the Relationship Between the Rate of Competition and the Prices of Large Transport Infrastructure Bu," Politická ekonomie, Prague University of Economics and Business, vol. 2010(3), pages 343-356.
    7. Holt, Charles A, Jr, 1980. "Competitive Bidding for Contracts under Alternative Auction Procedures," Journal of Political Economy, University of Chicago Press, vol. 88(3), pages 433-445, June.
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    Cited by:

    1. Raventós, Pedro & Zolezzi, Sandro, 2015. "Electronic tendering of pharmaceuticals and medical devices in Chile," Journal of Business Research, Elsevier, vol. 68(12), pages 2569-2578.
    2. António Curado & Bruno Damásio & Sara Encarnação & Cristian Candia & Flávio L Pinheiro, 2021. "Scaling behavior of public procurement activity," PLOS ONE, Public Library of Science, vol. 16(12), pages 1-19, December.
    3. Radovan Dráb & Tomáš Štofa & Radoslav Delina, 2022. "Analysis of the efficiency of electronic reverse auction settings: big data evidence," Electronic Commerce Research, Springer, vol. 22(2), pages 427-450, June.
    4. Janda, Karel & Moreira, David, 2016. "Predicting bankruptcy in European e-commerce sector," MPRA Paper 74460, University Library of Munich, Germany.
    5. Svidroňová Mária Murray & Meričková Beáta Mikušová & Gondášová Lýdia, 2016. "E-procurement in Contracting-out of Public Goods and Services: Evidence from Slovakia," NISPAcee Journal of Public Administration and Policy, Sciendo, vol. 9(1), pages 57-71, June.

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    More about this item

    Keywords

    municipalities; efficiency; public procurement; electronic auctions;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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