Working Paper: CEPR ID: DP14044
Authors: Francesco Decarolis; Vincenzo Atella
Abstract: The public procurement of medical devices is increasingly relying on auction mechanisms to move toward more transparent procedures and to promote competition between suppliers in a market where the quality of the products matters enormously and an improper auctiondesign could be very harmful. Based on Italian hospital data, we present new evidence on the performance of the public tenders to procure orthopaedic prosthesis for hips, knees and shoulders. Focusing on three main outcomes, the number of participants, the presence of a single firm bidding and the winning rebate, for the first time we describe how features related to the tender, hospital, region and bidders' competition all contribute to explain the functioning of the procurement auctions. The evidence we obtain can meaningfully help policy makers in designing and implementing better public procurement systems.
Keywords: procurement; auctions; medical devices; orthopaedic prosthesis; tender characteristics; Italy
JEL Codes: I18; J18; C21
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Auction Type (D44) | Bidder Participation (D44) |
| Lowest Price Criterion (D41) | Bidder Participation (D44) |
| Lowest Price Criterion (D41) | Rebates (H23) |
| Regional Budgetary Constraints (piano di rientro) (H60) | Bidder Participation (D44) |
| Regional Budgetary Constraints (piano di rientro) (H60) | Winning Prices (D44) |
| Framework Agreements (F53) | Prices (D49) |
| Framework Agreements (F53) | Rebates (H23) |