The Impact of Timing on Bidding Behavior in Procurement Auctions of Contracts with Private Costs

We provide a comparison of bidding behavior between multi-round and single-round auctions considering bid lettings for asphalt construction contracts that are known to have primarily private costs. Using a reduced-form difference-in-difference approach as well as the nonparametric estimation technique that was proposed by Racine and Li (J Econom 119(1):99–130, <CitationRef CitationID="CR24">2004</CitationRef>) we find that bidding is more aggressive in a sequential multi-round setting than in a simultaneous single-round format. We explore potential causes for the bidding difference across formats that are related to synergies and the level of bidder participation. Copyright Springer Science+Business Media, LLC. 2013