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American Economic Review: Vol. 101 No. 6 (October 2011)

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Bid Preference Programs and Participation in Highway Procurement Auctions

Article Citation

Krasnokutskaya, Elena, and Katja Seim. 2011. "Bid Preference Programs and Participation in Highway Procurement Auctions." American Economic Review, 101(6): 2653-86.

DOI: 10.1257/aer.101.6.2653

Abstract

We use data from highway procurement auctions subject to California's Small Business Preference program to study the effect of bid preferences on auction outcomes. Our analysis is based on an estimated model of firms' bidding and participation decisions, which allows us to evaluate the effects of current and alternative policy designs. We show that incorporating participation responses significantly alters the assessment of preferential treatment policies. (JEL D44, H76, R42)

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Authors

Krasnokutskaya, Elena (Johns Hopkins U)
Seim, Katja (U PA)

JEL Classifications

D44: Auctions
H76: State and Local Government: Other Expenditure Categories
R42: Transportation Systems: Government and Private Investment Analysis; Road Maintenance, Transportation Planning


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