Procurement Contracting With Time Incentives: Theory and Evidence

• 成果类型: Article
• 署名作者: Lewis, Gregory; Bajari, Patrick
• 署名单位: Harvard University; National Bureau of Economic Research; University of Minnesota System; University of Minnesota Twin Cities
• 刊物名称: QUARTERLY JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0033-5533
• DOI: 10.1093/qje/qjr026
• 发表日期: 2011
• 页码: 1173-1211
• 关键词: competition; INFORMATION; DESIGN

摘要

In public procurement, social welfare often depends on how quickly the good is delivered. A leading example is highway construction, where slow completion inflicts a negative externality on commuters. In response, highway departments award some contracts using scoring auctions, which give contractors explicit incentives for accelerated delivery. We characterize efficient design of these mechanisms. We then gather an extensive data set of highway projects awarded by the California Department of Transportation between 2003 and 2008. By comparing otherwise similar contracts, we show that where the scoring design was used, contracts were completed 30-40% faster and the welfare gains to commuters exceeded the increase in procurement costs. Using a structural model that endogenizes participation and bidding, we estimate that the counterfactual welfare gain from switching all contracts from the standard design to the efficient A+B design is nearly 22% of the total contract value ($1.14 billion).