A study of participation in dynamic auctions

• Autores: Joachim R. Groeger
• Localización: International economic review, ISSN-e 1468-2354, Vol. 55, Nº. 4, 2014, págs. 1129-1154
• Idioma: inglés
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• Resumen

  • This article studies repeated entry and bidding decisions in construction procurement auctions. I find evidence in the data that suggests the presence of significant cost savings from entering contracts of the same type. I estimate a dynamic auction model to measure the gains to experience for bidders. I allow for endogenous entry, synergies in entry, and unobserved auction heterogeneity. I find that a bidder can halve entry costs by focusing on specific contract types. An auctioneer can increase competition by awarding contracts of the same type in sequence. As a result, procurement costs for each contract can be lowered by 7%, a saving of $110,000.