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Design of Public Procurement Auctions: Evidence from Cleaning Contracts
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE). (Nationalekonomi)
University of Jyväskylä - School of Business and Economics.
KU Leuven - Faculty of Business and Economics (FBE); CEPR.
(English)Manuscript (preprint) (Other academic)
Abstract [en]

We compare beauty contests with first-price sealed-bid and scoring auctions, using data on public procurement of cleaning services in Swedish municipalities. The lowest submitted and winning bids are similar in all auction designs despite a higher price sensitivity of procurement bureaucrats in scoring (and first-price) auctions. There is more entry in beauty contests, by firms favored in them. Reduced entry into the scoring and price only auctions largely explains why the procurement costs are not lowered compared to beauty contests.

Keyword [en]
public procurement, auction design, entry, beauty contests, scoring
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URN: urn:nbn:se:umu:diva-110436OAI: diva2:862277
Available from: 2015-10-21 Created: 2015-10-21 Last updated: 2015-10-21

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