Bidding

About: Bidding is a research topic. Over the lifetime, 15371 publications have been published within this topic receiving 294233 citations. The topic is also known as: competitive bidding.

Corruption in public contracting auctions: the role of transparency in bidding processes

Abstract: **: The paper discusses corruption in public auctions and the role of transparency as a tool to prevent it. First, we analyse where corruption occurs, emphasizing the importance of considering the whole process, from deciding whether to contract-out to implementing the contract. We then analyse the effects of corruption on public auctions and argue that corruption undermines their stated aims. Second, we discuss the ways transparency can mitigate corruption and possible trade-offs regarding competition and efficiency. As an instrument, we focus on the Integrity Pact, a tool developed by Transparency International, and analyse cases in Argentina (school supplies) and Colombia (telecommunications), where transparency helped to prevent corruption and collusion and, furthermore, was able to enhance competition. We conclude with some policy implications.

Auction design with costly preference elicitation

Abstract: We consider auction design in a setting with costly preference elicitation. Well designed auctions can help to avoid unnecessary elicitation while determining efficient allocations. Careful design can also lead to more efficient outcomes when elicitation is too costly to permit perfect allocative efficiency. An incremental revelation principle is developed and used to motivate the role of proxied and indirect auction designs. Proxy agents, situated between bidders and an auction, can be used to maintain partial information about bidder preferences, to compute equilibrium bidding strategies based on the available information, and to elicit additional preference information as required. We derive information-theoretic elicitation policies for proxy agents under a simple model of costly elicitation across different auction designs. An experimental analysis demonstrates that indirect mechanisms, such as ascending-price auctions, can achieve better allocative efficiency with less preference elicitation than sealed-bid (direct) auctions because they promote better decisions about preference elicitation.

Short-term hydro scheduling in a liberalized power system

Abstract: The paper addresses the challenges of short-term hydropower scheduling in a liberalized power system. Hydropower systems may have quite complex topologies with many cascaded reservoirs/power plants in the same river system. The reservoirs may have very different storage capacity with significant water travel time that makes the decisions coupled between several time steps. In other words, the decisions in one time interval have strong impact on what's possible to do in later time steps. In systems where some of the reservoirs have significant storage capacity, the use of the hydropower resources short-term will be coupled with the long-term strategic decisions. It is not feasible to have the short-term decisions within the same model as the long-term decisions because modeling of uncertainty is important. The problem is decomposed into a planning hierarchy where the long/mid-term models provide boundary conditions for the short-term models. The major items of this paper are: challenges and possible solutions in hydro system modeling, a flexible coupling principle between short-term and mid-term scheduling, strategies for bidding in a spot market.

A new wholesale bidding mechanism for enhanced demand response in smart grids

Abstract: Calls to improve customer participation as a key element of smart grids have reinvigorated interest in demand-side features such as distributed generation, on-site storage and demand response. In the context of deregulated market structures, these features can improve flexibility of demand, but at the cost of added uncertainty. Therefore, how to implement these features under deregulated power markets is worth consideration. To address the problems induced by the demand-side participation features together with deregulated electricity markets, this paper presents a new bidding mechanism, which uses Price Elasticity Matrices (PEM) to model the concerned features. Three typical traditional bidding mechanisms are reviewed and compared with the proposed bidding mechanism. This paper also presents an algorithm guaranteeing better convergence to carry out the proposed bidding mechanism. The concept of a stepped supply curve's relative slope is defined in the algorithm. Multiple benefits induced are shown by numerical examples in a day-ahead wholesale electricity pool under real-time pricing.

Competitive bidding and states' purchase of services: the case of mental health care in Massachusetts.

Abstract: Over the past two decades states have significantly increased their use of competitive bidding to purchase health and social services from private agencies. Competitive contracting is thought to facilitate program administration, to reduce costs, and to increase the quality of delivered services. We evaluate these claims in light of Massachusetts' experience with competitive contracting for mental health care. We find that few of the expected benefits are achieved. In practice, supposedly competitive bidding systems often degenerate into administratively complicated negotiations between the state and private monopolies. This results in higher costs and lower quality of services. In light of this negative assessment, three strategies for reform are proposed and evaluate.