Title: Incentives for repeated contracts in public sector: empirical study of gasoline procurement in Russia

Authors: Andrei Yakovlev; Oleg Vyglovsky; Olga Demidova; Alexander Bashlyk

Addresses: Institute for Industrial and Market Studies, National Research University Higher School of Economics (NRU HSE), 20, Myasnitskaya ul., 101000, Moscow, Russia ' Institute for Industrial and Market Studies, National Research University Higher School of Economics (NRU HSE), 20, Myasnitskaya ul., 101000, Moscow, Russia ' Institute for Industrial and Market Studies, National Research University Higher School of Economics (NRU HSE), 20, Myasnitskaya ul., 101000, Moscow, Russia ' Institute for Industrial and Market Studies, National Research University Higher School of Economics (NRU HSE), 20, Myasnitskaya ul., 101000, Moscow, Russia

Abstract: Contrary to previous studies of 'relational contracting' this paper analyses the impact of repeated procurements on the price of a simple homogeneous product. Using a large dataset on procurements of AI-92 gasoline in Russia in 2011, we show that price difference between repeated and one-time contracts can be explained by the type of procurement procedures. Less transparent procedures (single-sourcing and requests for quotations) are more suitable for corrupt collusion. This might explain relative price increase in this case. On the contrary, the prices of repeated contracts were lower compared to one-time procurement in the case of more transparent e-auctions.

Keywords: public procurement; repeated contracts; relational contracting; corruption; e-auctions; gasoline procurement; petrol procurement; Russia; price differences; procurement procedures; single-sourcing; quotation requests; corrupt collusion.

DOI: 10.1504/IJPM.2016.076305

International Journal of Procurement Management, 2016 Vol.9 No.3, pp.272 - 289

Received: 16 Feb 2015
Accepted: 23 Mar 2015

Published online: 29 Apr 2016 *

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