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Gian Luigi Albano

Gian Luigi Albano

Ph.D. Economics, Université catholique de Louvain, Belgium

About

55
Publications
34,251
Reads
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411
Citations
Additional affiliations
September 2015 - December 2017
LUISS Guido Carli, Libera Università Internazionale degli Studi Sociali
Position
  • Professor (Associate)
Description
  • During the a. y. 2015-16 I have taught two undergraduate courses: IO and Game Theory. In 2016-17, I will be in charge of half of the course on Public Economics to 3rd-year undergraduate students.
September 1999 - December 2006
University College London
Position
  • Permanent Lecturer

Publications

Publications (55)
Article
Purpose The aim of this case study is to review the in-depth (and successful) investigation carried out in 2016 by the Italian Competition Authority [Autorità Garante della Concorrenza e del Mercato (AGCM)] on a nation-wide (multi-lot) framework agreement for consulting services. We also critically assess the tender design and emphasize which dimen...
Article
Full-text available
We report the results of a procurement experiments where subjects compete for procurement contracts to be awarded by means of a scoring auction. Two experimental conditions are considered depending on the relative quality-price weight in the scoring rule. We show that different quality-price weights in the scoring rule dramatically alter the strate...
Article
In procurement markets, unverifiable quality provision may be obtained either by direct negotiation or by competitive processes which discriminate firms on the basis of their past performance. However, discrimination is not allowed in many institutional contexts. We show that a non-discriminatory competitive process with a reserve price may allow t...
Article
Unverifiable quality may affect the enforcement of procurement contracts even when the award procedure is able to select the most efficient firm in the market. In this paper, we show that a discriminatory competitive mechanism – which awards the contract on the basis of price and (firms’) past performance – yields an efficient allocation of the con...
Chapter
Full-text available
The chapter explores the main economic dimensions in the design of framework agreements, emphasising the role of demand heterogeneity, degree of uncertainty borne by competing firms and the degree of incompleteness of the master contract.
Book
Full-text available
Framework agreements have arisen in response to the well-documented high costs of public procurement procedures. The agreements have significant potential to improve procedural efficiency in public procurement, but they are complex to operate. Inadequate preparation and implementation can also frustrate their potential both to tackle waste, abuse a...
Article
e-Procurement is widely advocated as an effective tool to promote the participation of small and medium enterprises (SMEs) as well as micro enterprises in the public procurement market. However, little evidence exists as to what factors may influence the allocation of contracts to differently sized suppliers. We address this issue by analyzing a ra...
Article
Full-text available
The current European regulation on public procurement recognizes the Most Economically Advantageous Tender as the main award criterion for awarding public contracts through competitive procedures. This leaves, though, public buyers with potentially many options for evaluating tenders. This paper discusses the main economic features of «scoring rule...
Article
While e-procurement is widely advocated as an effective tool to promote participation of SMEs in public procurement markets, little evidence exists as to what factors may influence the allocation of contracts to differently sized firms. We analyze transactions – below the EU-thresholds – that took place on the Italian e-marketplace. Although micro...
Article
Demand aggregation is widely recognized as a efficiency-enhancing solution in public procurement. The technique of framework agreements represents possibly the most effective solution to struck a balance between contract standardization and customization. Central purchasing organizations in many countries are progressively relying on framework agre...
Article
Full-text available
Although it is widely recognized that public procurement may act as a “pull” mechanism for development and employment, serious concerns are constantly voiced as to the friendliness of public procurement processes towards small and medium enterprises (SMEs), arguably the most vital sector of the EU economy. In this paper, we will have a look at the...
Article
E-procurement is widely advocated as an effective tool to promote the participation of small and medium enterprises (SMEs) as well as micro enterprises in the public procurement market. However, little evidence exists as to what factors may influence the allocation of contracts to differently sized suppliers in the same class of micro, small and me...
Article
The risks of integrity arising at the execution stage of public procurement processes are often overlooked. When contract award and contract management are handled by different public authorities integrity concerns about contract execution become more acute. Data from the monitoring mechanism of the National Frame Contracts awarded by Consip S.p.A....
Article
We show how repeatedly awarded procurement contracts where unverifiable quality dimensions are relevant can be reinterpreted as relational contracts between a buyer and a contractor that is threatened by a potentially less efficient competitor. We compare two scenarios: 1) Under freedom of choices the (public) buyer freely chooses the contractor, t...
Article
Full-text available
The public expenditure for goods, services and works represents a sizeable fraction of the overall public spending, reaching 10-15% of GDP in many countries across the world. In the EU, the public procurement market, covering all levels of government and public agencies, is estimated to be worth around one-sixth of total GDP, that is, approximately...
Article
We show how repeatedly awarded procurement contracts where unverifiable quality dimensions are relevant can be reinterpreted as relational contracts between a buyer and a contractor that is threatened by a potentially less efficient competitor. We compare two scenarios: 1) Under freedom of choices the (public) buyer freely chooses the contractor, t...
Article
Full-text available
We prove existence of mixed strategy equilibria for a class of discontinuous two-player games with non-compact strategy sets. As a corollary of our main results, we obtain a continuum of mixed strategy equilibria for the first- and second-price two-bidder auctions with toeholds. We also find Klemperer’s (2000) result about the existence of mixed st...
Article
Competition is usually regarded as a principle of the awarding phase of public procurement. Yet, it is not taken into due account in the procurement process as a whole, particularly at the execution phase. The problem of a lack in competition, transparency and accountability after the award of public procurement or of a master contract is widesprea...
Article
Full-text available
When designing a national public procurement system, the degree of centralization (or, equivalently, the degree of demand aggregation) is one of the most crucial as well as puzzling policy choices. Centralized procurement has been traditionally considered as an instrument to reduce public spending. In more recent years, though, and particularly aft...
Article
Full-text available
Sequential procurement of multiple contracts/lots is widespread and often regularly repeated. We analyze how sequentiality and its interaction with asymmetries across bidders and lots affect the sustainability of supplier/bidder collusion. Sequential procurement stabilizes supplier collusion (compared to simultaneous procurement) by allowing not on...
Conference Paper
Full-text available
Public buyers are often mandated by law to adopt competitive procedures to ensure transparency and promote full competition. Recent economic literature, however, suggests that open competition can perform poorly in allocating complex projects. In exploring the determinants of bidding behavior in tenders for complex IT services, we find results that...
Article
Joint bidding is the practice of two or more independent suppliers submitting a single bid, a widespread practice in private and public procurement. This practice may generate efficiencies through synergies and information sharing, but may also be abused to reduce the number of competitors or-even worse-to facilitate or enforce collusion among them...
Article
Full-text available
Il processo di modernizzazione della Pubblica Amministrazione italiana viene solo di rado percepito come un'opportunità per rilanciare l'intero si- stema economico nazionale. Un ruolo particolare è sicuramente ricoperto dalla trasformazione dell'intero processo di approvvigionamento di beni e servizi (cosiddetto Public Procurement) che è strumental...
Article
Competitive bidding (as auctions) is commonly used to procure goods and services. Public buyers are often mandated by law to adopt competitive procedures to ensure transparency and promote full competition. Recent theoretical literature, however, suggests that open competition can perform poorly in allocating complex projects. In exploring the dete...
Article
Participation of small businesses in the market for public contracts is widely recognized as a key policy issue. It is also commonly held that the adoption of e-procurement solutions can be effective in pursuing such an objective. To this end, we analyze the transactions completed in the period 2004-2007 through the Italian Government's e-procureme...
Article
When procurement contracts are awarded through competitive tendering participating firms commit ex ante to fulfil a set of contractual duties. However, selected contractors may find profitable to renege ex post on their promises by opportunistically delivering lower quality standards. In order to deter ex post moral hazard, buyers may use different...
Article
Full-text available
Joint bidding is the practice of two or more independent suppliers submitting a single bid. In Europe, the regulation of joint bidding in procurement varies a lot across countries, and is in several cases related to the inability of an individual firm to be admitted as a solo bidder. In the first part of the paper we analyse the basic economics of...
Article
This paper analyzes the impact of the reserve price on participation and the degree of competition in competitive tenderingfor public contracts. Our approach aims at reconciling the most recent developments in auction theory with the more practicalissues arising in centralized public procurement. In lowest price competitive tendering, we argue that...
Article
Full-text available
This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...
Article
Full-text available
Quality and suppliers performance are essential for procurement. This Paper analyses these important issues from two perspectives. The first part deals with the topic of contracting. It describes the features of some common types of contracts that the buyer may choose according to the circumstances of the procurement. The central issue is how the p...
Article
Full-text available
A seminal result in the theory of competitive bidding holds that the buyer can lower the expected awarding price of a procurement contract by setting a reserve price below her opportunity cost for realizing the project. In this paper, we first provide a non-technical explanation for this result, then review how the "optimal reserve price" varies wi...
Article
Full-text available
In softening price competition at the tendering stage, a bidding ring may jeopardize the buyer's effort to award a procurement contract at her most advantageous economic conditions. By exploiting the similarities between oligopolistic and procurement markets, we discuss how structural conditions of the procurement market such as the presence of bar...
Article
Procurement awarding mechanisms based on average price have been advocated to soften price competition and reduce cost overruns. We show that their theoretical support is shaky. When the bid closest to the average is awarded, firms submit identical bids, making the selection extremely costly and random, without reducing opportunistic behaviors ex-p...
Article
Full-text available
We consider two ascending auctions for multiple objects, namely, an English and a Japanese auction, and derive a perfect Bayesian equilibrium of the Japanese auction by exploiting its strategic equivalence with the survival auction, which consists of a finite sequence of sealed-bid auctions. Thus an equilibrium of a continuous time game is derived...
Article
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We construct a family of retaliatory equilibria for the Japanese ascending auction for multiple objects and show that, while it is immune to many of the tacitly collusive equilibria studied in the literature, it is not entirely immune when some bidders are commonly known to be interested in a specific object.
Article
Full-text available
Although performance measurement systems are likely to have significant recruitment and retention consequences these have received much less attention that the individual incentive effects. This paper explores these recruitment and retention consequences in organizations, such as those in the public sector, which are characterized by rigidities in...
Article
We consider a class of bidding games under complete information and construct a continuum of pure and mixed strategy equilibria. As corollaries of our results, we obtain a continuum of equilibria for the N-bidder first-price auction and the N-firm Bertrand game.
Article
Full-text available
This paper argues that governments should pay greater heed to recruitment and retention when designing performance measurement systems for bureaucracies. In the face of pervasive rigidities in public sector pay, internal performance measurement rewards quitters and scars stayers and therefore makes it difficult to recruit and retain. Full and immed...
Article
Full-text available
We propose a Bayesian approach to inference in repeated English auctions. The model tests the dynamic behaviour of a sequence of prices in a repeated English auction. We apply the technique to a sale of antiques and find that the sequence of selling prices displays a dynamic pattern.
Article
We consider two ascending auctions for multiple objects: the SEAMO (simultaneous English auction for multiple objects) and the the JAMO (Japanese auction for multiple objects). We first derive a (competitive) Perfect Bayesian Equilibrium of the JAMO by exploiting the strategic equivalence between the JAMO and the Survival Auction which consists of...
Article
Full-text available
We study an auction mechanism combining the war of attrition and the all-pay auction under the assumption that buyers' signals are affiliated. We provide a sufficient condition which guarantees the existence of a symmetric, increasing equilibrium bidding strategy, but rules out full extraction of buyers' surplus by the seller. We develop revenue co...
Article
The UMTS auction in the United Kingdom recently completed. This note examines some of the problems related to this sale of spectrum rights, and analyses how they have been tackled by the auction designers. It reports on the main stages of the auction, and concludes with some remarks about the forthcoming auction in Italy.
Article
In an example where some bidders have superadditive values, we characterize the equilibria of a simultaneous ascending auction and compare the revenue and efficiency generated with ones generated by the sequential, the one-shot simultaneous, and the Vickrey–Clarke–Groves auctions.
Article
We propose a Bayesian approach to empirical auction models. We argue that the Bayesian paradigm is more suitable to the study of empirical strategic models than its frequentist counterpart. We perform an estimation of our model on an auction of hand-made miniature sculptures organized by Christie's in London.
Article
Full-text available
Participation of small firms in the market for public contracts is a key policy issue. E-procurement is becoming a way through which such participation can be made more effective. Using a large sample of transactions completed through the MEPA (the Electronic Public Administration's Marketplace) in the period 2004-2007 we show that (very) small sup...
Article
Full-text available
In this paper we explore the determinants of suppliers' bidding behavior in public procurement competitive tendering for IT services. We exploit a unique dataset of contracts awarded by the Italian Public Procurement Agency (Consip S.p.A.) on behalf of the Italian Ministry of Economy and Finance. We have several results. First, both the nature of t...
Article
Full-text available
Sequential first-price auctions for multiple objects are very common in procurement, electricity, tobacco, timber, and oil lease markets. In this paper we identify two ways in which a sequential format may facilitate collusion among bidders relative to a simultaneous one. The first effect relates to the cartel’s ability to identify and punish defec...

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Projects (4)
Project
Competitive procurement whereby both price and non-price dimensions are evaluated constitutes an arguably challenging strategic environment for participating firms. We pursue two broad objectives: 1. to test how participants' behaviour in laboratory experiments diverge for theoretical predictions (e.g., Che, 1993); and ii) to assess how bidding functions are affected by the nature of the scoring rule (that is, the mathematical algorithm used to determine the financial score)
Project
In procurement markets, while competitive bidding allows to select the most efficient firm, it does not normally ensure quality provision when the procurement contract comprise unverifiable quality dimensions. In a repeated procurement context, quality provision may be obtained by discriminating firms on the basis of their past performance, whereas, however, discrimination is not allowed in many institutional contexts. We show that a non-discriminatory competitive process with a reserve price may obtain the same result; in other words, a competitive mechanism with a reserve price allows the buyer to yield an efficient allocation of the contract and to implement the level of quality desired by the buyer. Quality enforcement arises out of a relational contract whereby the buyer threatens to set a `low' reserve price in future competitive tendering processes if any contractor fails to provide the required quality. We study an infinitely repeated procurement model with two firms and one buyer imperfectly informed on the firms' cost, in which, in each period, the buyer runs a standard first-price auction with reserve price. We study the cases of players using grim trigger or stick-and-carrot strategies, analysing both the case of a committed and uncommitted buyer; different hypothesis about the buyer's commitment capture different features of the buyer, mostly related to her public/private nature. We find that the competitive processes with reserve price work well to elicit the desired level of unverifiable quality provided that the buyer's valuation of the project is not too high, so that she can credibly threaten the firms to set, in case a contractor fails to deliver the required quality level, a reserve price so low that no firm is willing to participate to the tender; this low reserve price is however never observed in equilibrium.