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HIGH AND LOW BIDS IN TENDERS: STRATEGIC PRICING AND OTHER BIDDING BEHAVIOUR IN PUBLIC TENDERS OF PASSENGER RAILWAY SERVICES
Author(s) -
ALEXANDERSSON Gunnar,
HULTÉN Staffan
Publication year - 2007
Publication title -
annals of public and cooperative economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.526
H-Index - 37
eISSN - 1467-8292
pISSN - 1370-4788
DOI - 10.1111/j.1467-8292.2007.00331.x
Subject(s) - call for bids , bidding , procurement , business , deregulation , public transport , industrial organization , commerce , marketing , economics , transport engineering , market economy , engineering
** : An important component in the deregulation of the public sector in the European Union is public procurement of services and products. This article studies the bidding behaviour of firms participating in public tenders of passenger railway services in Sweden. In a theoretical part of the article we discuss the various possible reasons behind high and low bids in tenders, linked to a discussion on pricing strategies and continuous and discontinuous economies of scale regarding costs of production. Detailed data on bids and bidders in Swedish tenders of railway services are then analyzed. 37 tenders taking place between 1989 and 2005 are included.