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The impact of timing on bidding behavior in procurement auctions of contracts with private costs

Research output: Contribution to journalJournal articlepeer-review

<mark>Journal publication date</mark>05/2013
<mark>Journal</mark>Review of Industrial Organization
Issue number3
Number of pages23
Pages (from-to)321-343
Publication StatusPublished
<mark>Original language</mark>English


We provide a comparison of bidding behavior between multi-round and single-round auctions considering bid lettings for asphalt construction contracts that are known to have primarily private costs. Using a reduced-form difference-in-difference approach as well as the nonparametric estimation technique that was proposed by Racine and Li (J Econom 119(1):99–130, 2004) we find that bidding is more aggressive in a sequential multi-round setting than in a simultaneous single-round format. We explore potential causes for the bidding difference across formats that are related to synergies and the level of bidder participation.