Review of Industrial Organization

, Volume 18, Issue 1, pp 105–113 | Cite as

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

  • AndréS GóMez-Lobo
  • Stefan Szymanski
Article

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.

Econometrics of auctions refuse collection tendering 

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Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  • AndréS GóMez-Lobo
    • 1
  • Stefan Szymanski
    • 2
  1. 1.Department of EconomicsUniversity of ChileSantiagoChile
  2. 2.Imperial College Management SchoolLondonU.K.

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