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Synergies in Recurring Procurement Auctions: An Empirical Investigation
Author(s) -
Silva Dakshina G.
Publication year - 2005
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1093/ei/cbi005
Subject(s) - bidding , common value auction , procurement , microeconomics , economics , industrial organization , unique bid auction , business , marketing , auction theory
This article examines the impact of synergies on bidder behavior in recurring road construction procurement auctions. The study reveals that projects are spatially correlated. When bidders with potential synergies participate, the results indicate that their probability of bidding and winning increases and they bid more aggressively. Finally, the study shows that a firm that is capacity unconstrained will bid more aggressively than one that is capacity constrained.