Bidder Asymmetry in Infrastructure Procurement [electronic resource] : Are There Any Fringe Bidders? / Estache, Antonio.
Saved in:
| Online Access: |
Full Text (via Open Knowledge Repository) |
|---|---|
| Main Author: | |
| Corporate Author: | |
| Other title: | World Bank e-Library. World Bank e-Library. |
| Format: | Electronic eBook |
| Language: | English |
| Published: |
Washington, D.C. :
The World Bank,
2008.
|
| Series: | Policy research working papers.
|
| Subjects: |
| Abstract: | Asymmetric auctions are among the most rapidly growing areas in the auction literature. The potential benefits from improved auction efficiency are expected to be enormous in public procurement auctions related to official development projects. Entrant bidders are considered a key to enhance competition in an auction and break potential collusive arrangements among incumbent bidders. Asymmetric auction theory predicts that weak (fringe) bidders would bid more aggressively when they are faced with a strong (incumbent) opponent. Using official development assistance procurement data, this paper finds that in the major infrastructure sectors, entrants submitted systematically aggressive bids in the presence of an incumbent bidder. The findings also show that a high concentration of incumbents in an auction would harm auction efficiency, raising procurement costs. The results suggest that auctioneers should encourage fringe bidders to actively participate in the bidding process while maintaining the quality of the projects. This is conducive to enhancing competitive circumstances in public procurements and improving allocative efficiency. |
|---|---|
| Physical Description: | 1 online resource (24 pages) |