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Testing Low-Balling Strategy in Rural Road Procurement

机译：在农村公路采购中测试低价策略

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摘要

A "low-balling strategy" by bidding contractors has increasingly been recognized as an important issue in public infrastructure procurement. Public works contracts are often imperfect and renegotiated after the contract award. Given the expectation for ex post adjustments, bidders seem motivated to take advantage of the low-balling strategy. This paper analyzes the endogeneity between the bid strategy and ex post adjustments. Using procurement data on rural road projects in Nepal, it shows that the bid strategy and adjustments are determined endogenously in the system. Anticipating cost and time overruns, firms would likely undercut normal bid prices. Then, ex post contract adjustments actually happen, because of their too aggressive bids.
机译：招标承包商的“低价策略”已被越来越多地公认为公共基础设施采购中的重要问题。授予合同后，公共工程合同通常不完善且需要重新谈判。考虑到事后调整的期望，投标者似乎有动力利用低预算策略。本文分析了出价策略和事后调整之间的内生性。使用尼泊尔农村公路项目的采购数据，它表明出价策略和调整是系统内生确定的。预期成本和时间超支，企业可能会降低正常的投标价格。然后，由于出价过高，实际发生了事后合同调整。

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