Going once, going twice, SOLD! : the economics of past and present public procurement in Sweden

• Main Author: Lundberg, Sofia
• Format: Doctoral or Postdoctoral Thesis
• Language: English
• Published: Institutionen för nationalekonomi 2001
• Subjects: Adverse selection; asymmetric information; common value; fixed price contract; logit model; negative binomial; negotiated procedure; open procedure; private values; simplified procedure; stochastic cost frontier; Sverige; 1800-talet; 1900-talet; Prisbildning; Auktioner; Offentlig upphandling; tjänster; Economic History; Ekonomisk historia; History; Historia; Sociology; Sociologi; Northern Sweden
• Online Access: http://urn.kb.se/resolve?urn=urn:nbn:se:umu:diva-73622

This thesis is about the economic aspects of public procurement of services through auctionsin Sweden. It focuses on two different institutions, auctions used to find foste r-parents forboarded out children in the 19th century, and auctions of cleaning service contracts in the 20 thcentury. I n both cases, the contracting entity is the municipality or its representative, thelowest bidder wins the auction, and is paid in accordance with his/her bid.In the child auctions, c hildren were allotted to foster-parents by means of an open biddingprocess, the descending English auction, where the bids were given continuously to theauctioneer. In modern public procurement sealed bids ar e used in accordance with the firstprice,sealed bid auction. The first part of this thesis is about price formation in the childauctions and a study is made of the children who were auctioned several times, indicatingasymmetric information among bidders or adverse selection in this market. These subjects arestudied using field data on 601 child auctions held in Northern Sweden during the period 1863to 1889. The empirical findings in the first paper suggest that the foster-parents had a cleareconomic motive in these auctions. The child characteristics significantly affect the amount ofcompensation paid to the foster-parent. There is also evidence that farmers preferred older,more productive children. The second paper studies whether a re-auctioned child commandeda higher or lower price than a child that was not re-auctioned. The results indicate some formof asymmetric information because foster-parents demanded a higher level of compensationfor a re-auctioned child. The results also suggest that the probability that a child was reauctionedincreased if he/she was not healthy.The third paper in the thesis discusses a kind of "paradox". Although there is a competitiveeffect on the bids in the auction of cleaning service contracts, the contracting entity has anoption, given by law, to restrict the number of bidders. In th is paper, an ...