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Does Publicity Affect Competition? Evidence from Discontinuities in Public Procurement Auctions
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1725-6704
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EUI ECO; 2008/04
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COVIELLO, Decio, MARINIELLO, Mario, Does Publicity Affect Competition? Evidence from Discontinuities in Public Procurement Auctions, EUI ECO, 2008/04 - https://hdl.handle.net/1814/7861
Abstract
Calls for tenders are the natural devices to inform bidders, thus to
enlarge the pool of potential participants. We exploit discontinuities
generated by the Italian Law on tender's publicity to identify the
effect of enlarging the pool of potential participants on competition
in public procurement auctions. We show that most of the effects
of publicity are at regional and European level. Increasing tenders'
publicity from local to regional determines an increase in the number
of bidders by 50% and an extra reduction of 5% in the price paid by the
contracting authority; increasing publicity from national to European
has no effect on the number of bidders but it determines an extra
reduction of 10% in the price paid by the contracting authority. No
effect is observed when publicity is increased from regional to national.
Finally, we relate measures of competition to ex-post duration of the
works finding a negative correlation between duration and the number
of bidders or the winning rebate.