A Law of Large Numbers: Bidding and Compulsory Competitive Tendering for Refuse Collection Contracts

A Law of Large Numbers: Bidding and Compulsory Competitive Tendering for Refuse Collection Contracts In this paper we investigate the relationship betweencosts and number of bidders for U.K. local authorities'refuse collection contracts. We find that a highernumber of bids is associated with a lower cost ofservice. This finding, as well as being an importantempirical verification of standard proposition inauction theory, has important policy implications. TheU.K. Labour government elected in 1997 has abolishedCompulsory Competitive Tendering (CCT). Our findingsindicate that this would increase local authorities'expenditure in refuse collection. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

A Law of Large Numbers: Bidding and Compulsory Competitive Tendering for Refuse Collection Contracts

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2001 by Kluwer Academic Publishers
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1023/A:1026545306923
Publisher site
See Article on Publisher Site

Abstract

In this paper we investigate the relationship betweencosts and number of bidders for U.K. local authorities'refuse collection contracts. We find that a highernumber of bids is associated with a lower cost ofservice. This finding, as well as being an importantempirical verification of standard proposition inauction theory, has important policy implications. TheU.K. Labour government elected in 1997 has abolishedCompulsory Competitive Tendering (CCT). Our findingsindicate that this would increase local authorities'expenditure in refuse collection.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Oct 3, 2004

References

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