Does Publicity Affect Competition? Evidence From Discontinuities In Public Procurement Auctions

Calls for tenders are the natural devices to inform bidders, thus to enlarge the pool of potential participants. The authors exploit discontinuities generated by the Italian Law on tender's publicity to identify the effect of enlarging the pool of potential participants on competition in public procurement auctions. They show that most of the effects of publicity are at regional and European level. Increasing tenders' publicity from local to regional determines an increase in the number of bidders by 50% and an extra reduction of 5% in the price paid by the contracting authority; increasing publicity from national to European has no effect on the number of bidders but it determines an extra reduction of 10% in the price paid by the contracting authority.