SITE-Stockholm School of Economics
Stockholm, SE-113 83
Institutional Affiliations: SITE-Stockholm School of Economics and EIEF, University of Tor Vergata, and CEPR
NBER Working Papers and Publications
|August 2018||Certification, Reputation and Entry: An Empirical Analysis|
with Xiang Hui, Maryam Saeedi, Steven Tadelis: w24916
Markets with asymmetric information will often employ third-party certification labels to distinguish between higher and lower quality transactions, yet little is known about the effects of certification policies on the evolution of markets. How does the stringency in quality certification affect the intensity and composition of entry, incumbents' reactions, and market outcomes? We use detailed administrative data and exploit a policy change on eBay to explore how a more selective certification policy affects entry and behavior across a rich set of online market segments. We find that after the policy change, entry increases and does so more intensely in markets where it is harder to become certified. The average quality of entrants also increases more in the more affected markets, while t...
|January 2018||Bureaucratic Competence and Procurement Outcomes|
with Francesco Decarolis, Leonardo M. Giuffrida, Elisabetta Iossa, Vincenzo Mollisi: w24201
Does a more competent public bureaucracy contribute to better economic outcomes? We address this question in the context of the US federal procurement of services and works by combining contract-level data on procurement performance and bureau-level data on competence and workforce characteristics. Using an instrumental variable strategy, we find that an increase in bureau competence causes a significant and economically important reduction in: i) delays, ii) cost overruns, and iii) number of renegotiations. Cooperation within the office appears to be a key driver of the findings.
|November 2016||Past Performance and Procurement Outcomes|
with Francesco Decarolis, Riccardo Pacini: w22814
Reputational incentives may be a powerful mechanism for improving supplier performance. We analyze their role in contract awarding, exploiting an experiment run by a firm which introduced a new vendor rating system scoring suppliers' past performance and linking it to the award of future contracts. We study responses in both price and performance to the announcement of the switch from price-only to price-and-rating auctions. Across the 136 parameters scored, overall compliance improves from 25 percent to 80 percent. Improvements involve all parameters and suppliers, but are more pronounced for parameters receiving a higher weight in the announced scoring auction. Prices do not significantly change overall, but we find some evidence of lower prices right after the announcement when supplier...