We analyze a regime change from beauty contests to first-price sealed-bid and scoring auctions, u... more We analyze a regime change from beauty contests to first-price sealed-bid and scoring auctions, using Swedish data on public procurement of cleaning services. In beauty contests, the lowest bid often lost, leaving substantial money on the table. The procurement costs were similar before and after the regime change: i) Entry strongly decreases the procurement cost, but did not change. Entry would have decreased had the municipalities not adjusted the objects of auctions. ii) Municipalities favored inhouse suppliers in the old regime, leading to more aggressive bidding by others. With favoritism reduced, these changes balanced each other out.
Public procurement is officially regarded as an effective means to secure environmental improveme... more Public procurement is officially regarded as an effective means to secure environmental improvement. Estimates by the European Commission indicate that public authorities within the European Union typically purchase goods and services corresponding to approximately 16 percent of GNP per annum. Hence, it is believed, private firms can be stimulated to invest in sustainable production technologies if the market power of public bodies is exerted through Green Public Procurement (GPP) policies. In this paper we assess whether GPP is a costefficient policy tool, and if so whether its implementation can, from a welfare perspective, deter or stimulate entry to procurement markets.
Combinatorial procurement auctions are increasingly being employed in the private and public sect... more Combinatorial procurement auctions are increasingly being employed in the private and public sector as an alternative to simultaneous single contract auctions. This mechanism has the advantage that it enables suppliers to express synergies across bundles of public contracts. This mitigates the exposure problem and also has the potential to both lower the price paid by the procuring authority and to enhance efficiency. This paper provides stylized facts of recently performed combinatorial public procurements in various markets in Sweden.
Som med vederbörligt tillstånd av rektorsämbetet vid Umeå universitet för vinnande av filosofie d... more Som med vederbörligt tillstånd av rektorsämbetet vid Umeå universitet för vinnande av filosofie doktorsexamen framlägges till offentlig granskning vid institutionen för nationalekonomi Hörsal S205h,
This paper studies a Green Public Procurement (GPP) policy decided by the Swedish government in 2... more This paper studies a Green Public Procurement (GPP) policy decided by the Swedish government in 2006, stating objectives related to organic farming. The policy aims to increase the public sector's organic food purchases, in order to incentivise Swedish farmers to convert to organic practices, thereby contributing to national environmental quality objectives. We analyse the effect of organic food procurement on organic agricultural land, using panel data from 2003 to 2016 including information on municipalities' organic food purchases, land use, and direct subsidies aimed at organic production. Based on different specifications and mainly FGLS estimations, we conclude that the 2006 organic food policy is associated with a significant positive impact on organic agricultural land. A significant effect of direct agricultural policy in the form of subsidies is also found.
During the nineteenth century, destitute and/or orphan Swedish children were boarded out as a par... more During the nineteenth century, destitute and/or orphan Swedish children were boarded out as a part of that time's public assistance. The families to which they were allocated were determined by means of English auctions. This paper studies the price differences among such children using empirical data from 601 auctions. Price is regressed on variables related both to the buyer and
International Advances in Economic Research, Aug 1, 2005
The bidding process in public procurement in Sweden is a first-price sealed bid auction. Although... more The bidding process in public procurement in Sweden is a first-price sealed bid auction. Although there is a competitive effect on the bids in this type of auction, the contracting entity can through the choice of procurement procedure, restrict the number of bidders. This paper studies this choice and imposes an implementation cost on the contracting entity to motivate such a restriction. The results, based on data for Swedish municipalities, suggest that contract specifications and municipality characteristics (that are assumed to influence the implementation cost); affect the volume of the procurement and the number of bidders, but not necessarily the choice of procurement procedure.
Politicians expect green public procurement (GPP) to serve as an environmental policy instrument.... more Politicians expect green public procurement (GPP) to serve as an environmental policy instrument. However, in order for GPP to work as an effective policy instrument, it is important to take into consideration potential suppliers' decisions to participate in the procurement process, the total number of bidders, and the screening of bidders with respect to mandatory green criteria. The aim of this paper is to empirically study GPP in this respect. The analysis presented here is based on data from Swedish cleaning service procurements that are unique in that they contain very detailed information on various environmental standards set by the contracting authorities. We find at best only a weak effect on supplier behavior, and this suggests that the use of GPP in this situation does not live up to its political expectations. Keywords Auctions Á Compliance cost Á Degree of competition Á Endogenous entry Á Objective effectiveness JEL codes D44 Á H57 Á Q01 Á Q28 Financial support from the Swedish Research Council and the Umeå University Young Researcher Award is gratefully acknowledged.
One reason for allowing combination bids in procurement auctions is that this mechanism may pass ... more One reason for allowing combination bids in procurement auctions is that this mechanism may pass firms' potential cost synergies on to the procuring entity leading to a reduction in cost for the procuring entity. However, the option for a firm to submit bids on bundles of contracts gives rise to a strategic effect because a firm's stand-alone bids compete with its package bids. Therefore, bidders might find it profitable to inflate their stand-alone bids in order to favour their package bids. Hence, the observed discount in a package bids would not reflect the procurer's cost saving of using the combinatorial format. Using data from single-contract auctions and multi-contract auctions with the option to submit package bids, we find that firms inflate their stand alone bids in the combinatorial auctions compared to their corresponding bids in standard procurement auctions. Further, the analysis does not show significant differences in the procurer's cost by type of auction.
The economics of e-learning was identified as a key priority for virtual campuses in the consulta... more The economics of e-learning was identified as a key priority for virtual campuses in the consultation workshop held in Brussels on 23 November 2004. The eLene-EE (Economics of E-learning) project has aimed to increase knowledge on the incentives to create virtual campuses and initiate teaching methods for education based on ICT and its effects, ensuring that this is efficiently carried out while reflecting the various situations at the partner universities. This RUSC special issue on the economics of e-learning shows the theoretical framework we have defined and some of the results we have obtained within the eLene-EE project, funded by the European Commission. Our findings have clear policy implications and will help e-learning designers, learners, financers, and decision makers to build up, adapt, and improve their initiatives. The project is divided into five integrated research and development work packages (WP) with participants from universities in the eLene consortium (from S...
The paper investigates the observed correlation between price and quality in multidimensional pub... more The paper investigates the observed correlation between price and quality in multidimensional public procurement auctions, using data from the Swedish public sector. The scoring rules applied in these auctions are both independent and interdependent scoring rules. The paper illustrates the buyer’s incentive to distort his true assessment of the quality dimension in bids subjected to an interdependent scoring rule. Estimating the Spearman’s rank order correlation, we find that the correlation between price and quality equals zero when an interdependent scoring rule is applied, whereas the same coefficient under the independent scoring rule takes the value of 0.31, a result in line with similar estimates obtained in price-quality tests of private consumer goods. * Mats A. Bergman, School of Social Sciences, Södertörn University – Stockholm, Sweden; [email protected] ** Anders Lunander, School of Business at Örebro University, Sweden; [email protected] *** Sofia Lundberg, Departm...
Advocates of green public procurement (GPP) argue that the public sector can use its purchasing p... more Advocates of green public procurement (GPP) argue that the public sector can use its purchasing power to influence producers and consumers to reduce their negative impact on the environment. Our aim is to assess GPP as an environmental policy instrument and its ability to lead to the achievement of environmental objectives. Central to our analysis is the extent to which polluting firms choose to adapt to the public sector’s environmental requirements and to invest in greener technologies. Our theoretical finding is that the potential of GPP to function as an objective effective instrument of environmental policy is limited and can actually be counterproductive. From an environmental policy point of view, it is crucial that the GPP aims for an environmental standard beyond the technology of the polluting firms and is designed with reference to defined environmental objectives.
Combinatorial procurement auctions enable suppliers to pass their potential cost synergies on to ... more Combinatorial procurement auctions enable suppliers to pass their potential cost synergies on to the procuring entity and may therefore lead to lower costs and enhance efficiency. However, bidders might find it profitable to inflate their stand-alone bids in order to favour their package bids. Using data from standard and combinatorial procurement auctions, we find that bids on individual contracts in simultaneous standard auctions without the option to submit package bids are significantly lower than the corresponding stand-alone bids in combinatorial auctions. Further, no significant difference in procurer's cost as explained by auction format is found.
We analyze a regime change from beauty contests to first-price sealed-bid and scoring auctions, u... more We analyze a regime change from beauty contests to first-price sealed-bid and scoring auctions, using Swedish data on public procurement of cleaning services. In beauty contests, the lowest bid often lost, leaving substantial money on the table. The procurement costs were similar before and after the regime change: i) Entry strongly decreases the procurement cost, but did not change. Entry would have decreased had the municipalities not adjusted the objects of auctions. ii) Municipalities favored inhouse suppliers in the old regime, leading to more aggressive bidding by others. With favoritism reduced, these changes balanced each other out.
Public procurement is officially regarded as an effective means to secure environmental improveme... more Public procurement is officially regarded as an effective means to secure environmental improvement. Estimates by the European Commission indicate that public authorities within the European Union typically purchase goods and services corresponding to approximately 16 percent of GNP per annum. Hence, it is believed, private firms can be stimulated to invest in sustainable production technologies if the market power of public bodies is exerted through Green Public Procurement (GPP) policies. In this paper we assess whether GPP is a costefficient policy tool, and if so whether its implementation can, from a welfare perspective, deter or stimulate entry to procurement markets.
Combinatorial procurement auctions are increasingly being employed in the private and public sect... more Combinatorial procurement auctions are increasingly being employed in the private and public sector as an alternative to simultaneous single contract auctions. This mechanism has the advantage that it enables suppliers to express synergies across bundles of public contracts. This mitigates the exposure problem and also has the potential to both lower the price paid by the procuring authority and to enhance efficiency. This paper provides stylized facts of recently performed combinatorial public procurements in various markets in Sweden.
Som med vederbörligt tillstånd av rektorsämbetet vid Umeå universitet för vinnande av filosofie d... more Som med vederbörligt tillstånd av rektorsämbetet vid Umeå universitet för vinnande av filosofie doktorsexamen framlägges till offentlig granskning vid institutionen för nationalekonomi Hörsal S205h,
This paper studies a Green Public Procurement (GPP) policy decided by the Swedish government in 2... more This paper studies a Green Public Procurement (GPP) policy decided by the Swedish government in 2006, stating objectives related to organic farming. The policy aims to increase the public sector's organic food purchases, in order to incentivise Swedish farmers to convert to organic practices, thereby contributing to national environmental quality objectives. We analyse the effect of organic food procurement on organic agricultural land, using panel data from 2003 to 2016 including information on municipalities' organic food purchases, land use, and direct subsidies aimed at organic production. Based on different specifications and mainly FGLS estimations, we conclude that the 2006 organic food policy is associated with a significant positive impact on organic agricultural land. A significant effect of direct agricultural policy in the form of subsidies is also found.
During the nineteenth century, destitute and/or orphan Swedish children were boarded out as a par... more During the nineteenth century, destitute and/or orphan Swedish children were boarded out as a part of that time's public assistance. The families to which they were allocated were determined by means of English auctions. This paper studies the price differences among such children using empirical data from 601 auctions. Price is regressed on variables related both to the buyer and
International Advances in Economic Research, Aug 1, 2005
The bidding process in public procurement in Sweden is a first-price sealed bid auction. Although... more The bidding process in public procurement in Sweden is a first-price sealed bid auction. Although there is a competitive effect on the bids in this type of auction, the contracting entity can through the choice of procurement procedure, restrict the number of bidders. This paper studies this choice and imposes an implementation cost on the contracting entity to motivate such a restriction. The results, based on data for Swedish municipalities, suggest that contract specifications and municipality characteristics (that are assumed to influence the implementation cost); affect the volume of the procurement and the number of bidders, but not necessarily the choice of procurement procedure.
Politicians expect green public procurement (GPP) to serve as an environmental policy instrument.... more Politicians expect green public procurement (GPP) to serve as an environmental policy instrument. However, in order for GPP to work as an effective policy instrument, it is important to take into consideration potential suppliers' decisions to participate in the procurement process, the total number of bidders, and the screening of bidders with respect to mandatory green criteria. The aim of this paper is to empirically study GPP in this respect. The analysis presented here is based on data from Swedish cleaning service procurements that are unique in that they contain very detailed information on various environmental standards set by the contracting authorities. We find at best only a weak effect on supplier behavior, and this suggests that the use of GPP in this situation does not live up to its political expectations. Keywords Auctions Á Compliance cost Á Degree of competition Á Endogenous entry Á Objective effectiveness JEL codes D44 Á H57 Á Q01 Á Q28 Financial support from the Swedish Research Council and the Umeå University Young Researcher Award is gratefully acknowledged.
One reason for allowing combination bids in procurement auctions is that this mechanism may pass ... more One reason for allowing combination bids in procurement auctions is that this mechanism may pass firms' potential cost synergies on to the procuring entity leading to a reduction in cost for the procuring entity. However, the option for a firm to submit bids on bundles of contracts gives rise to a strategic effect because a firm's stand-alone bids compete with its package bids. Therefore, bidders might find it profitable to inflate their stand-alone bids in order to favour their package bids. Hence, the observed discount in a package bids would not reflect the procurer's cost saving of using the combinatorial format. Using data from single-contract auctions and multi-contract auctions with the option to submit package bids, we find that firms inflate their stand alone bids in the combinatorial auctions compared to their corresponding bids in standard procurement auctions. Further, the analysis does not show significant differences in the procurer's cost by type of auction.
The economics of e-learning was identified as a key priority for virtual campuses in the consulta... more The economics of e-learning was identified as a key priority for virtual campuses in the consultation workshop held in Brussels on 23 November 2004. The eLene-EE (Economics of E-learning) project has aimed to increase knowledge on the incentives to create virtual campuses and initiate teaching methods for education based on ICT and its effects, ensuring that this is efficiently carried out while reflecting the various situations at the partner universities. This RUSC special issue on the economics of e-learning shows the theoretical framework we have defined and some of the results we have obtained within the eLene-EE project, funded by the European Commission. Our findings have clear policy implications and will help e-learning designers, learners, financers, and decision makers to build up, adapt, and improve their initiatives. The project is divided into five integrated research and development work packages (WP) with participants from universities in the eLene consortium (from S...
The paper investigates the observed correlation between price and quality in multidimensional pub... more The paper investigates the observed correlation between price and quality in multidimensional public procurement auctions, using data from the Swedish public sector. The scoring rules applied in these auctions are both independent and interdependent scoring rules. The paper illustrates the buyer’s incentive to distort his true assessment of the quality dimension in bids subjected to an interdependent scoring rule. Estimating the Spearman’s rank order correlation, we find that the correlation between price and quality equals zero when an interdependent scoring rule is applied, whereas the same coefficient under the independent scoring rule takes the value of 0.31, a result in line with similar estimates obtained in price-quality tests of private consumer goods. * Mats A. Bergman, School of Social Sciences, Södertörn University – Stockholm, Sweden; [email protected] ** Anders Lunander, School of Business at Örebro University, Sweden; [email protected] *** Sofia Lundberg, Departm...
Advocates of green public procurement (GPP) argue that the public sector can use its purchasing p... more Advocates of green public procurement (GPP) argue that the public sector can use its purchasing power to influence producers and consumers to reduce their negative impact on the environment. Our aim is to assess GPP as an environmental policy instrument and its ability to lead to the achievement of environmental objectives. Central to our analysis is the extent to which polluting firms choose to adapt to the public sector’s environmental requirements and to invest in greener technologies. Our theoretical finding is that the potential of GPP to function as an objective effective instrument of environmental policy is limited and can actually be counterproductive. From an environmental policy point of view, it is crucial that the GPP aims for an environmental standard beyond the technology of the polluting firms and is designed with reference to defined environmental objectives.
Combinatorial procurement auctions enable suppliers to pass their potential cost synergies on to ... more Combinatorial procurement auctions enable suppliers to pass their potential cost synergies on to the procuring entity and may therefore lead to lower costs and enhance efficiency. However, bidders might find it profitable to inflate their stand-alone bids in order to favour their package bids. Using data from standard and combinatorial procurement auctions, we find that bids on individual contracts in simultaneous standard auctions without the option to submit package bids are significantly lower than the corresponding stand-alone bids in combinatorial auctions. Further, no significant difference in procurer's cost as explained by auction format is found.
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