IDEAS home Printed from https://ideas.repec.org/p/eui/euiwps/eco2008-04.html
   My bibliography  Save this paper

Does Publicity Affect Competition? Evidence from Discontinuities in Public Procurement Auctions?

Author

Listed:
  • Decio Coviello
  • Mario Mariniello

Abstract

Calls for tenders are the natural devices to inform bidders, thus to enlarge the pool of potential participants. We exploit discontinuities generated by the Italian Law on tender's publicity to identify the effect of enlarging the pool of potential participants on competition in public procurement auctions. We show that most of the effects of publicity are at regional and European level. Increasing tenders' publicity from local to regional determines an increase in the number of bidders by 50% and an extra reduction of 5% in the price paid by the contracting authority; increasing publicity from national to European has no effect on the number of bidders but it determines an extra reduction of 10% in the price paid by the contracting authority. No effect is observed when publicity is increased from regional to national. Finally, we relate measures of competition to ex-post duration of the works finding a negative correlation between duration and the number of bidders or the winning rebate.

Suggested Citation

  • Decio Coviello & Mario Mariniello, 2008. "Does Publicity Affect Competition? Evidence from Discontinuities in Public Procurement Auctions?," Economics Working Papers ECO2008/04, European University Institute.
    • Handle: RePEc:eui:euiwps:eco2008/04
    as

    Download full text from publisher

    File URL: http://cadmus.iue.it/dspace/bitstream/1814/7861/1/ECO-2008-04.pdf
    File Function: main text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Juan‐José Ganuza, 2007. "Competition And Cost Overruns In Procurement," Journal of Industrial Economics, Wiley Blackwell, vol. 55(4), pages 633-660, December.
    2. O. Compte & A. Lambert-Mogiliansky & T. Verdier, 2005. "Corruption and Competition in Procurement Auctions," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 1-15, Spring.
    3. Pietro Garibaldi & Francesco Giavazzi & Andrea Ichino & Enrico Rettore, 2012. "College Cost and Time to Complete a Degree: Evidence from Tuition Discontinuities," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 699-711, August.
    4. Paul Klemperer, 2002. "What Really Matters in Auction Design," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 169-189, Winter.
    5. Gian Luigi Albano & Milo Bianchi & Giancarlo Spagnolo, 2006. "Bid Average Methods in Procurement," Rivista di Politica Economica, SIPI Spa, vol. 96(1), pages 41-62, January-F.
    6. Flavio Menezes & Paulo Klinger Monteiro, 1996. "A Note on Auctions with Endogenous Participation," Microeconomics 9610003, University Library of Munich, Germany, revised 31 Oct 1996.
    7. Imbens, Guido W. & Lemieux, Thomas, 2008. "Regression discontinuity designs: A guide to practice," Journal of Econometrics, Elsevier, vol. 142(2), pages 615-635, February.
    8. Celentani, Marco & Ganuza, Juan-Jose, 2002. "Corruption and competition in procurement," European Economic Review, Elsevier, vol. 46(7), pages 1273-1303, July.
    9. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-209, January.
    10. Joshua D. Angrist & Kathryn Graddy & Guido W. Imbens, 2000. "The Interpretation of Instrumental Variables Estimators in Simultaneous Equations Models with an Application to the Demand for Fish," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(3), pages 499-527.
    11. repec:kap:iaecre:v:11:y:2005:i:3:p:329-342 is not listed on IDEAS
    12. Joshua D. Angrist & Victor Lavy, 1999. "Using Maimonides' Rule to Estimate the Effect of Class Size on Scholastic Achievement," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(2), pages 533-575.
    13. Bajari, Patrick & Hortacsu, Ali, 2003. "The Winner's Curse, Reserve Prices, and Endogenous Entry: Empirical Insights from eBay Auctions," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 329-355, Summer.
    14. Justin McCrary, 2007. "Manipulation of the Running Variable in the Regression Discontinuity Design: A Density Test," NBER Technical Working Papers 0334, National Bureau of Economic Research, Inc.
    15. Levin, Dan & Smith, James L, 1994. "Equilibrium in Auctions with Entry," American Economic Review, American Economic Association, vol. 84(3), pages 585-599, June.
    16. Sofia Lundberg, 2005. "Restrictions on Competition in Municipal Competitive Procurement in Sweden," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 11(3), pages 329-342, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stefano Galavotti & Luigi Moretti & Paola Valbonesi, 2018. "Sophisticated Bidders in Beauty-Contest Auctions," American Economic Journal: Microeconomics, American Economic Association, vol. 10(4), pages 1-26, November.
    2. Decio Coviello & Luigi Moretti & Giancarlo Spagnolo & Paola Valbonesi, 2018. "Court Efficiency and Procurement Performance," Scandinavian Journal of Economics, Wiley Blackwell, vol. 120(3), pages 826-858, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pietro Garibaldi & Francesco Giavazzi & Andrea Ichino & Enrico Rettore, 2012. "College Cost and Time to Complete a Degree: Evidence from Tuition Discontinuities," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 699-711, August.
    2. Syngjoo Choi & Lars Nesheim & Imran Rasul, 2016. "Reserve Price Effects In Auctions: Estimates From Multiple Regression-Discontinuity Designs," Economic Inquiry, Western Economic Association International, vol. 54(1), pages 294-314, January.
    3. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    4. Decio Coviello & Andrea Guglielmo & Giancarlo Spagnolo, 2015. "The Effect of Discretion on Procurement Performance," CEIS Research Paper 361, Tor Vergata University, CEIS, revised 17 Nov 2015.
    5. Decio Coviello & Andrea Guglielmo & Giancarlo Spagnolo, 2018. "The Effect of Discretion on Procurement Performance," Management Science, INFORMS, vol. 64(2), pages 715-738, February.
    6. Minbo Xu & Daniel Z. Li, 2019. "Equilibrium competition, social welfare and corruption in procurement auctions," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 53(3), pages 443-465, October.
    7. Bertanha, Marinho, 2020. "Regression discontinuity design with many thresholds," Journal of Econometrics, Elsevier, vol. 218(1), pages 216-241.
    8. Ari Hyytinen & Sofia Lundberg & Otto Toivanen, 2018. "Design of public procurement auctions: evidence from cleaning contracts," RAND Journal of Economics, RAND Corporation, vol. 49(2), pages 398-426, June.
    9. Blaise Melly & Rafael Lalive, 2020. "Estimation, Inference, and Interpretation in the Regression Discontinuity Design," Diskussionsschriften dp2016, Universitaet Bern, Departement Volkswirtschaft.
    10. Coviello, Decio & Mariniello, Mario, 2014. "Publicity requirements in public procurement: Evidence from a regression discontinuity design," Journal of Public Economics, Elsevier, vol. 109(C), pages 76-100.
    11. Jason M. Lindo & Nicholas J. Sanders & Philip Oreopoulos, 2010. "Ability, Gender, and Performance Standards: Evidence from Academic Probation," American Economic Journal: Applied Economics, American Economic Association, vol. 2(2), pages 95-117, April.
    12. José Miguel Benavente & Gustavo Crespi & Alessandro Maffioli, 2007. "The Impact of National Research Funds: An Evaluation of the Chilean FONDECYT," OVE Working Papers 0307, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
    13. Frandsen, Brigham R. & Frölich, Markus & Melly, Blaise, 2012. "Quantile treatment effects in the regression discontinuity design," Journal of Econometrics, Elsevier, vol. 168(2), pages 382-395.
    14. Otsu, Taisuke & Xu, Ke-Li & Matsushita, Yukitoshi, 2015. "Empirical likelihood for regression discontinuity design," Journal of Econometrics, Elsevier, vol. 186(1), pages 94-112.
    15. Meng, Lingsheng, 2013. "Evaluating China's poverty alleviation program: A regression discontinuity approach," Journal of Public Economics, Elsevier, vol. 101(C), pages 1-11.
    16. Machin, Stephen & McNally, Sandra & Ruiz-Valenzuela, Jenifer, 2020. "Entry through the narrow door: The costs of just failing high stakes exams," Journal of Public Economics, Elsevier, vol. 190(C).
    17. Peng Hao & Jun-Peng Guo & Eoghan O’Neill & Yong-Heng Shi, 2023. "When Will First-Price Work Well? The Impact of Anti-Corruption Rules on Photovoltaic Power Generation Procurement Auctions," Sustainability, MDPI, vol. 15(4), pages 1-24, February.
    18. Bauer, Thomas K. & Bender, Stefan & Paloyo, Alfredo R. & Schmidt, Christoph M., 2012. "Evaluating the labor-market effects of compulsory military service," European Economic Review, Elsevier, vol. 56(4), pages 814-829.
    19. Juan Carlos Calcagno & Bridget Terry Long, 2008. "The Impact of Postsecondary Remediation Using a Regression Discontinuity Approach: Addressing Endogenous Sorting and Noncompliance," NBER Working Papers 14194, National Bureau of Economic Research, Inc.
    20. Peter Hull & Michal Kolesár & Christopher Walters, 2022. "Labor by design: contributions of David Card, Joshua Angrist, and Guido Imbens," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(3), pages 603-645, July.

    More about this item

    Keywords

    Public Procurement Auctions; Publicity; Regression Discontinuity; Duration Analysis.;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eui:euiwps:eco2008/04. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Cécile Brière (email available below). General contact details of provider: https://edirc.repec.org/data/deiueit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.