Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/208592 
Year of Publication: 
2019
Series/Report no.: 
Working paper No. 1-2019
Publisher: 
Copenhagen Business School (CBS), Department of Economics, Frederiksberg
Abstract: 
The paper analyzes the excess entry hypothesis for sealed-bid first price public procurement auctions.The hypothesis is proved analytically for any feasible combination of bid preparation cost and bid evaluation cost when the bidders face a rectangular cost density function and confirmed in numerical simulations based on a family of flexible cost density functions. The excess entry hypothesis implies that the procurer may reduce both his own cost and the social cost by imposing a positive fee on the bids. Sequential search is a superior strategy to a public procurement auction whether or not the procurer imposes an optimal fee on the bids.
Subjects: 
Excess entry
Public procurement auctions
Optimal fee
Sequential search
JEL: 
D21
D43
D44
L13
L51
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.