Awarding Price, Contract Performance, and Bids Screening: Evidence from Procurement Auctions

• 成果类型: Article
• 署名作者: Decarolis, Francesco
• 署名单位: Boston University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.6.1.108
• 发表日期: 2014
• 页码: 108-132
• 关键词: information; incentives; winners; COSTS; MODEL

摘要

This paper presents evidence on the perverse trade-off that first price auctions induce between low prices at the awarding stage and poor ex post performance when bids are not binding commitments. By exploiting the different timing with which first price auctions were introduced in Italy to procure public works, this study finds that at least half of the cost savings from lower winning prices are lost because of ex post renegotiation. Screening the lowest price bid for its responsiveness prevents performance worsening but also reduces the initial cost savings by a third and induces delays in awarding the contract.