Public Procurement Auctions
- "Awarding Price, Contract Performance and Bids Screening: Evidence from Procurement Auctions," ( Web Appendix ) forthcoming at American Economic Journal: Applied Economics
ABSTRACT: This paper presents evidence on the perverse trade-off that first price auctions induce between low prices at the awarding stage and poor ex post performance when bids are not binding commitments. By exploiting the different timing with which first price auctions were introduced in Italy to procure public works, this study finds that at least half of the cost savings from lower winning prices are lost because of ex post renegotiation. Screening the lowest price bid for its responsiveness prevents performance worsening but also reduces the initial cost savings by a third and induces delays in awarding the contract.
- "Detecting Bidders Groups in Collusive
Auctions" (2013, Paper
, Web Appendix ) with Timothy
ABSTRACT: This paper studies entry and bidding in
procurement auctions were contracts are awarded to the bid closest to a trimmed
average bid. We characterize equilibrium under competition and show that
it is weak due to strong incentives for cooperation. We present
statistical tests motivated by a model of coalition entry and bidding. We
show that our tests perform well in a validation dataset with known
cartels. We also use them to investigate cooperation in a larger dataset where cartels are suspected but not known. We
detect several suspiciously cooperative groups with potentially
substantial, positive effects upon auctioneers revenues.
- "When the Highest Bidder Loses the Auction: Theory
and Evidence from Public Procurement" (Revised version to be posted soon)
Mid-revision draft (2010) using old data available here.
Older version (2009) published as Bank of Italy Working Paper 717 available here.
ABSTRACT: This paper analyzes two methods used in public procurement auctions to deal with
the risk of bidder default: first price auctions with ex-post screening of bid responsiveness and average bid auctions in which the bidder closest to the
average bid wins. It is shown that when both defaults and screening are sufficiently costly auctioneer prefer average bid auctions. The effect of the two auction formats on revenues and
efficiency is empirically studied by estimating a structural model of firms costs distributions using a new dataset of Italian public procurement auctions, run alternately
using first price auctions with screening or a form of average bid auctions.
Good to Be True Auctions" (2011, paper)
A short note summarizing the two main policy prescriptions coming from the
two research papers above: never use Average Bid Auctions, but be wise when
using First Price Auctions.
Joint with Michael
Klein World Bank - PPIAF Note. Entry of the "Body of Knowledge on
Awarding of Public Works in Italy: An Analysis of the Mechanisms for the
Selection of the Contractors" (2010, paper)
Bridges the economic and legal analysis of the system of public procurement
Joint with Cristina Giorgiantonio (Bank of Italy) and Valentina Giovanniello
(Court of Justice, Rome). Published in Mercato
Concorrenza e Regole XIII, 2, August 2011. Italian media coverage: 1 and 2.
Renegotiation of Public Contracts" (2011, English version forthcoming)
An extensive empirical exploration of the causes of renogotiation of public
Joint with Giuliana Palumbo (Bank of Italy). Italian version published in
"Le Infrastrutture in Italia," Bank
of Italy, 2011.
Health Care Markets
Sponsored Search Auctions
- "Economic Effects of
Democracy. An Empirical Analysis," Rivista di Politica
Economica, 2003, Nov-Dic, pp. 69 - 116.
ABSTRACT: This research analyses through the use of
instrumental variables estimation whether democracy has an effect on
variables belonging to three different categories: fiscal policy,
inequality in income distribution and political instability. It shows
there is no stable relation between democracy and fiscal policy variables
between countries of the sample in the 1978-1988 period. Democracy, on the
other hand, significantly affects the difference in middle class income
share (positively) and in changes at the top of the executive
Winning paper: Young Economist Award, 2004. Attributed by the European Economic
Winning Paper: Angelo Costa Award, 2003. Attributed by the Rivista di Politica Economica to the best
Italian BA theses in Economics, 1' classified.
- "Homotopy Continuation
Methods: An Algorithm for the Fixed Point and Newton Homotopy Methods with
Some Examples" (2005, with Ricardo Mayer and Martin Santamaria)
ABSTRACT: Homotopy Continuation Methods provide a useful
approach to find the zeros of functions mapping from Rn to Rn in a
globally convergent way. Homotopy Methods transform a hard problem into a
simpler one whit easily calculated zeros and then gradually deform this
simpler problem into the original one computing the zeros of the
intervening problems and eventually ending with a zero of the original
problem. This paper presents a description of a Matlab code that can
implement the Fixed Point Homotopy and the Newton Homotopy methods to find
the zeros of any function mapping from Rn to Rn. Four examples are also
provided for illustrative purposes. Two univariate examples, one of which
regarding a General Equilibrium problem, and two multivariate ones show
how the Matlab code can be easily applied to different problems. You will
need Matlab's Symbolic Math Toolbox to run this code.
Download only the H-topy Matlab code here or
download a zipped folder containing also the codes for all the examples here.
in Italian Law Journals and Books
- "Cronaca di un fallimento annunciato:
limpiego dellesclusione automatica negli appalti di lavori
pubblici" (2011, paper)
The legal origin and the economic consequences of almost 15 years of
usage of Average Bid Auctions in Italy.
Published in Giornale di
Diritto Amministrativo, Nov, 2011, pp 1246-1251.
- "Appalti Pubblici e Federalismo: Riparto di
Competenze e Vincoli Comunitari nell'Affidamento dei Lavori Pubblici in
Italia" (2011, paper)
An analysis of the successes and failures of several local reforms of
the public procurement system.
Joint with Cristina Giorgiantonio (Bank of Italy) and forthcoming in
"Rapporto sulla Finanza Pubblica", Fondazione Rosselli,
edited by Francesca Traclr and Marco Nicolai.