The Role of Publicity Requirements on Entry and Auctions Outcomes

Coviello DecioMariniello Mario
CEIS Research Paper
Using a regression discontinuity design, we document the effect of publicizing a procurement auction on entry and outcomes. We collect a large sample of procurement auctions, which by Italian law are assigned different publicity levels on the basis of their reserve price. We find that auctions publicized at the regional level have more bidders and higher winning rebates compared to auctions that are publicized on the notice board of the public administration managing the auction. Regionally-publicized auctions are also more likely to be won by bidders from outside the region, less likely to be won by small companies, and the same firm is more likely to win repeated auctions. Taken together, our results suggest that publicity informs more bidders and reduces search and preparation costs, which encourages entry and “improves” procurement.
Number: 180
Keywords: Publicity; Entry; Auctions; Regression Discontinuity;
JEL codes: D02 - D44 - C31 - L11
Date: Tuesday, December 21, 2010
Revision Date: Tuesday, December 21, 2010