Bidder Asymmetry in Infrastructure Procurement : Are There Any Fringe Bidders?
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. Ent...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/07/9644750/bidder-asymmetry-infrastructure-procurement-fringe-bidders http://hdl.handle.net/10986/6857 |
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okr-10986-68572021-04-23T14:02:32Z Bidder Asymmetry in Infrastructure Procurement : Are There Any Fringe Bidders? Estache, Antonio Iimi, Atsushi AFFILIATED ORGANIZATIONS AUCTION AUCTIONS BID BIDDER BIDDERS BIDDING BIDDING PROCESS BIDS CABLE CIVIL ENGINEERING CIVIL ENGINEERING CONSTRUCTION COMPETITION POLICY COMPETITIVE BIDDING COMPETITIVE BIDS COMPETITIVE PROCUREMENT COMPETITIVENESS CONCENTRATION RATIOS CONCESSION CONTRACT AWARDS CONTRACT DURATION CONTRACTORS COST ESTIMATE DATA COVERAGE DEVELOPING COUNTRIES DEVELOPMENT BANK DISTRIBUTION FUNCTIONS DUMMY VARIABLE DUMMY VARIABLES EFFICIENT ALLOCATION ELECTRICITY ELECTRICITY DISTRIBUTION ELECTRICITY GENERATION ELECTRICITY INDUSTRY ELECTRICITY SECTOR EQUIPMENT FAIR COMPETITION GENERATORS GOVERNMENT PROCUREMENT HOLDING INCUMBENT FIRMS INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PROJECTS INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INVESTMENT REQUIREMENTS INVESTMENT RESOURCES JOINT VENTURES LEVEL OF COMPETITION MARKET CONCENTRATION MINISTRY OF ECONOMY POLITICAL ECONOMY POWER PRIVATE EQUITY PRIVATE PARTNERSHIP PROCUREMENT PROCUREMENT PROCEDURE PROCUREMENT PROCESS PUBLIC PUBLIC CONTRACTS PUBLIC INFRASTRUCTURE PUBLIC INVESTMENT PUBLIC PROCUREMENT PUBLIC PROCUREMENTS RENEGOTIATION RESULT RESULTS SANITATION SECTOR TELECOM TELECOMMUNICATIONS TENDERING TRANSMISSION USER WATER DISTRIBUTION WATER SERVICE WEB WINNING BID 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. 2012-06-01T15:31:19Z 2012-06-01T15:31:19Z 2008-07 http://documents.worldbank.org/curated/en/2008/07/9644750/bidder-asymmetry-infrastructure-procurement-fringe-bidders http://hdl.handle.net/10986/6857 English Policy Research Working Paper No. 4660 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
AFFILIATED ORGANIZATIONS AUCTION AUCTIONS BID BIDDER BIDDERS BIDDING BIDDING PROCESS BIDS CABLE CIVIL ENGINEERING CIVIL ENGINEERING CONSTRUCTION COMPETITION POLICY COMPETITIVE BIDDING COMPETITIVE BIDS COMPETITIVE PROCUREMENT COMPETITIVENESS CONCENTRATION RATIOS CONCESSION CONTRACT AWARDS CONTRACT DURATION CONTRACTORS COST ESTIMATE DATA COVERAGE DEVELOPING COUNTRIES DEVELOPMENT BANK DISTRIBUTION FUNCTIONS DUMMY VARIABLE DUMMY VARIABLES EFFICIENT ALLOCATION ELECTRICITY ELECTRICITY DISTRIBUTION ELECTRICITY GENERATION ELECTRICITY INDUSTRY ELECTRICITY SECTOR EQUIPMENT FAIR COMPETITION GENERATORS GOVERNMENT PROCUREMENT HOLDING INCUMBENT FIRMS INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PROJECTS INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INVESTMENT REQUIREMENTS INVESTMENT RESOURCES JOINT VENTURES LEVEL OF COMPETITION MARKET CONCENTRATION MINISTRY OF ECONOMY POLITICAL ECONOMY POWER PRIVATE EQUITY PRIVATE PARTNERSHIP PROCUREMENT PROCUREMENT PROCEDURE PROCUREMENT PROCESS PUBLIC PUBLIC CONTRACTS PUBLIC INFRASTRUCTURE PUBLIC INVESTMENT PUBLIC PROCUREMENT PUBLIC PROCUREMENTS RENEGOTIATION RESULT RESULTS SANITATION SECTOR TELECOM TELECOMMUNICATIONS TENDERING TRANSMISSION USER WATER DISTRIBUTION WATER SERVICE WEB WINNING BID |
| spellingShingle |
AFFILIATED ORGANIZATIONS AUCTION AUCTIONS BID BIDDER BIDDERS BIDDING BIDDING PROCESS BIDS CABLE CIVIL ENGINEERING CIVIL ENGINEERING CONSTRUCTION COMPETITION POLICY COMPETITIVE BIDDING COMPETITIVE BIDS COMPETITIVE PROCUREMENT COMPETITIVENESS CONCENTRATION RATIOS CONCESSION CONTRACT AWARDS CONTRACT DURATION CONTRACTORS COST ESTIMATE DATA COVERAGE DEVELOPING COUNTRIES DEVELOPMENT BANK DISTRIBUTION FUNCTIONS DUMMY VARIABLE DUMMY VARIABLES EFFICIENT ALLOCATION ELECTRICITY ELECTRICITY DISTRIBUTION ELECTRICITY GENERATION ELECTRICITY INDUSTRY ELECTRICITY SECTOR EQUIPMENT FAIR COMPETITION GENERATORS GOVERNMENT PROCUREMENT HOLDING INCUMBENT FIRMS INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PROJECTS INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INVESTMENT REQUIREMENTS INVESTMENT RESOURCES JOINT VENTURES LEVEL OF COMPETITION MARKET CONCENTRATION MINISTRY OF ECONOMY POLITICAL ECONOMY POWER PRIVATE EQUITY PRIVATE PARTNERSHIP PROCUREMENT PROCUREMENT PROCEDURE PROCUREMENT PROCESS PUBLIC PUBLIC CONTRACTS PUBLIC INFRASTRUCTURE PUBLIC INVESTMENT PUBLIC PROCUREMENT PUBLIC PROCUREMENTS RENEGOTIATION RESULT RESULTS SANITATION SECTOR TELECOM TELECOMMUNICATIONS TENDERING TRANSMISSION USER WATER DISTRIBUTION WATER SERVICE WEB WINNING BID Estache, Antonio Iimi, Atsushi Bidder Asymmetry in Infrastructure Procurement : Are There Any Fringe Bidders? |
| relation |
Policy Research Working Paper No. 4660 |
| description |
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. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Estache, Antonio Iimi, Atsushi |
| author_facet |
Estache, Antonio Iimi, Atsushi |
| author_sort |
Estache, Antonio |
| title |
Bidder Asymmetry in Infrastructure Procurement : Are There Any Fringe Bidders? |
| title_short |
Bidder Asymmetry in Infrastructure Procurement : Are There Any Fringe Bidders? |
| title_full |
Bidder Asymmetry in Infrastructure Procurement : Are There Any Fringe Bidders? |
| title_fullStr |
Bidder Asymmetry in Infrastructure Procurement : Are There Any Fringe Bidders? |
| title_full_unstemmed |
Bidder Asymmetry in Infrastructure Procurement : Are There Any Fringe Bidders? |
| title_sort |
bidder asymmetry in infrastructure procurement : are there any fringe bidders? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2008/07/9644750/bidder-asymmetry-infrastructure-procurement-fringe-bidders http://hdl.handle.net/10986/6857 |
| _version_ |
1764400990480498688 |