Synergies in Recurring Procurement Auctions: An Empirical Investigation

De Silva, Dakshina G. (2005) Synergies in Recurring Procurement Auctions: An Empirical Investigation. Economic Inquiry, 43 (1). pp. 55-66. ISSN 0095-2583

Abstract

This article examines the impact of synergies on bidder behavior in recurring road construction procurement auctions. The study reveals that projects are spatially correlated. When bidders with potential synergies participate, the results indicate that their probability of bidding and winning increases and they bid more aggressively. Finally, the study shows that a firm that is capacity unconstrained will bid more aggressively than one that is capacity constrained.