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Incumbent and entrant bidding in scoring rule auctions: A study on Italian canteen services

Author

Listed:
  • Riccardo Camboni

    (DSEA, University of Padova)

  • Paola Valbonesi

    (DSEA, University of Padova and HSE-NRU, Moscow)

Abstract

We empirically investigate incumbents' and entrants' bids on an original dataset of 192 scoring rule auctions for canteen services in Italy. Our findings show that winning rebates are lower (i.e., prices paid by the public buyer are higher) when the contract is awarded to the incumbent supplier. This result is not explained by the observable characteristics of the auction and service awarded. We then develop a simple theoretical model that shows that such a result is consistent with a setting in which the buyer distorts the scoring function to increase the probability that the incumbent wins the auction at the cost of a higher purchasing price.

Suggested Citation

  • Riccardo Camboni & Paola Valbonesi, 2019. "Incumbent and entrant bidding in scoring rule auctions: A study on Italian canteen services," "Marco Fanno" Working Papers 0242, Dipartimento di Scienze Economiche "Marco Fanno".
    • Handle: RePEc:pad:wpaper:0242
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    Cited by:

    1. Sümeyra Atmaca & Riccardo Camboni & Elena Podkolzina & Koen Schoors & Paola Valbonesi, 2022. "Setting reserve prices in repeated procurement auctions," "Marco Fanno" Working Papers 0289, Dipartimento di Scienze Economiche "Marco Fanno".

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    More about this item

    Keywords

    Scoring Rule Auctions; Procurement; Incumbent and Entrant; Auction design;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • L88 - Industrial Organization - - Industry Studies: Services - - - Government Policy

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