Efficacy of a Bidder Training Program in Procurement Auctions with Selection and Entry

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• 研討會日期 : 2019-11-29
• 時間 : 10:30
• 主講人 : Professor Tong Li
• 主持人 : Professor Kong-Pin Chen
• 地點 : Conference Room B110
• 演講者簡介 : Professor Li received his Ph.D. in Economics from University of Southern California in 1997. He is currently a Professor at Vanderbilt University. His primary research and teaching interests are microeconometrics with a focus on identification and inference of econometric models with latent variables, and game-theoretic models.
• 演講摘要 : Bidder training programs for small business and disadvantaged business enterprise owners on how to behave in government procurement auctions have been on the rise, even though participation in these programs is voluntary. Participants in these programs receive construction management training which includes instruction on pre-qualification requirements and guidance on bidding successfully for contracts. However, the U.S. Commission on Civil Rights' 2005 report "Federal Procurement After Adarand" notes the lack of program evaluation, outcome measurement, empirical research and data collection on such training programs. In this paper, we consider three groups of bidders: ineligible bidders, eligible but untrained bidders, and trained bidders of the program, and propose a three-stage group-symmetric auction model involving participation in the program, as well as entry and bidding in the contracts, to evaluate the efficacy of such a bidder training program conducted by the Texas Department of Transportation. Using ten years of data, we examine the effects of such a training program on the decisions of eligible bidders to participate in the program, the entry and bidding behavior of bidders, their likelihood of success and, ultimately, the cost-savings for the Texas Department of Transportation. Our theoretical model and empirical analysis allow for potential asymmetries across various bidder groups, affiliation regarding bidders' private values and entry costs within and across these groups, and possible auction-specific unobserved heterogeneity. With the help of nested Archimedean copulas, we establish the existence and uniqueness of the bidding equilibrium and the existence of the participation and entry equilibriums, estimate the structural model, and further conduct counterfactual analysis to examine the effects of the training program.