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Can Lotteries help fix Procurement Failures? A Review of Theory and Evidence

Author

Listed:
  • Antonio Estache
  • Renaud Foucart
  • Tomas Serebrisky

Abstract

We review the potential costs and benefits of adding a lottery component to both discretionary negotiated procurement procedures and rule-based auction procedures. We show that adding a lottery component to auctions can increase quality and reduce issues related to limited liability, renegotiations, and bid-rigging. In the case of discretionary negotiated procedures, lotteries anchored in a diversity of randomization options can also reduce corruption risks. These include randomizing between bidders and between decision committee members, or randomizing audits.

Suggested Citation

  • Antonio Estache & Renaud Foucart & Tomas Serebrisky, 2024. "Can Lotteries help fix Procurement Failures? A Review of Theory and Evidence," Working Papers ECARES 2024-18, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:eca:wpaper:2013/378275
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