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Asymmetry in Procurement Auctions: Evidence from Snow Removal Contracts

Author

Listed:
  • Véronique Flambard

    (Grant MacEwan College - Grant MacEwan College)

  • Isabelle Perrigne

    (Penn State - Pennsylvania State University - Penn State System)

Abstract

Differences in cost efficiency and productivity across firms may introduce asymmetries in procurement auctions. Relying on a structural approach, this article investigates potential asymmetry among firms bidding for snow removal contracts in Montréal. The empirical results show that firms located in close proximity have a cost advantage relative to other firms in the most urbanised part of Montréal because of prohibitive equipment storage costs. The extent of inefficiency due to asymmetry is empirically assessed. Various policy experiments are performed. A bidding preference policy shows that the city could expect to reduce its costs for allocating snow removal contracts.

Suggested Citation

  • Véronique Flambard & Isabelle Perrigne, 2006. "Asymmetry in Procurement Auctions: Evidence from Snow Removal Contracts," Post-Print hal-04507097, HAL.
    • Handle: RePEc:hal:journl:hal-04507097
    DOI: 10.1111/j.1468-0297.2006.01121.x
    as

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    Keywords

    Auction Theory; Econometrics of auctions;

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