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The law of small numbers: investigating the benefits of restricted auctions for public procurement


Title The law of small numbers: investigating the benefits of restricted auctions for public procurement
Publication TypeJournal Article
Year of Publication2017
AuthorsChever, Lisa, Saussier Stéphane, and Yvrande-Billon Anne
Refereed DesignationRefereed
JournalApplied Economics
Date Published2017
AbstractA commonly accepted view in the academic literature is that dispensing with competition may only be beneficial when tendering complex contracts. However, restricted auctions are frequently used among EU member states to procure small contracts. In this article, we investigate this paradox. Using an original data set of 180 contracts used by a local public buyer of social housing between 2006 and 2009, we show that limiting competition may enable economies to be made on transaction costs while the most efficient bidders still come forward, and that abuses such as corruption or favouritism do not result. To our knowledge, this article is the first to shed light on the advantages of using restricted auctions when tendering small simple contracts.
URLhttp://www.tandfonline.com/doi/full/10.1080/00036846.2017.1279270
DOI10.1080/00036846.2017.1279270

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