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On the Competitive Effects of Screening in Procurement

Author

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  • Seres, G.

    (Tilburg University, Center For Economic Research)

  • Pigon, Adam

Abstract

Procuring authorities frequently use screening in order to mitigate risky bids. This study estimates the effect of bid screening and litigation on entry and bidding using a unique data set on highway construction procurement auctions in Poland. The market exhibits a screening method that ex post selects eligible offers. We demonstrate with an empirical model that this method disproportionately affects small firms and creates a barrier to entry. Our results suggest that screening increases bids by two channels. First, it directly inates bids as well as decreasing entry. Second, in a competitive market, lower entry also inates bids and prices.
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Suggested Citation

  • Seres, G. & Pigon, Adam, 2019. "On the Competitive Effects of Screening in Procurement," Discussion Paper 2019-019, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:3314c398-ea79-4f74-96f4-8cad82f8efa8
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    References listed on IDEAS

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    More about this item

    Keywords

    procurement; auctions; market design; litigation;
    All these keywords.

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • L5 - Industrial Organization - - Regulation and Industrial Policy

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