Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/312113 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11603
Publisher: 
CESifo GmbH, Munich
Abstract: 
Public procurement contracts require frequent renegotiation. We exploit the Czech implementation of an EU policy as a natural experiment to investigate the effect of eased renegotiation rules. We document that the eased renegotiation rules decreased winning bids but did not change the final price: the extra renegotiated price compensates for the lower winning bids. We next develop a stylized theoretical model to explain these results. Finally, we provide suggestive evidence of changes in contract allocation, but find no evidence of any reduction in the quality of the delivered objects.
Subjects: 
public procurement
renegotiation
contracts
JEL: 
H57
D44
D73
Document Type: 
Working Paper
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