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The Characteristics of Low Bid Price Survey Standards and Their Impact

The Characteristics of Low Bid Price Survey Standards and Their Impact This study aims to show that the low bid price survey standard has lower limit price characteristics and analyzes the behavior of firms in the public procurement market where the lower price limit is set. This study uses regression analysis to investigate the effects of exogenously determined low-price survey standards and predetermined prices on the winning bid ratio, the number of participants, the participants’ bid ratio, the difference between the second-place price and the winning bid, the second bid, and the single bidder’s bid. The results show that the winning bid ratio increased with a rise in the low-price survey standard, thereby indicating that the low-price survey standard has the characteristics of a lower limit price. The results also suggest that the low-price survey standard causes oversupply, which encourages firms to carefully set prices higher than the lower price limit, and intensify competition at levels higher than the lower limit price. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png "Journal of Industry, Competition and Trade" Springer Journals

The Characteristics of Low Bid Price Survey Standards and Their Impact

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References (31)

Publisher
Springer Journals
Copyright
Copyright © The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2021
ISSN
1566-1679
eISSN
1573-7012
DOI
10.1007/s10842-021-00372-6
Publisher site
See Article on Publisher Site

Abstract

This study aims to show that the low bid price survey standard has lower limit price characteristics and analyzes the behavior of firms in the public procurement market where the lower price limit is set. This study uses regression analysis to investigate the effects of exogenously determined low-price survey standards and predetermined prices on the winning bid ratio, the number of participants, the participants’ bid ratio, the difference between the second-place price and the winning bid, the second bid, and the single bidder’s bid. The results show that the winning bid ratio increased with a rise in the low-price survey standard, thereby indicating that the low-price survey standard has the characteristics of a lower limit price. The results also suggest that the low-price survey standard causes oversupply, which encourages firms to carefully set prices higher than the lower price limit, and intensify competition at levels higher than the lower limit price.

Journal

"Journal of Industry, Competition and Trade" – Springer Journals

Published: Dec 1, 2021

Keywords: Low bid price survey standards; Japanese economy; Oversupply; Public procurement; D44; H57; L74

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