Figure 4.
The figure shows two panels comparing bid price ratios and winning bid proportions. Panel a, General competitive bidding, indicates a small negative discontinuity of 0.076 with a z-value of 0.99, showing a gradual decline near the cutoff around 0.95. Panel b, Designated bidding, shows a larger negative discontinuity of 0.454 with a z-value of 3.45, indicating a sharp drop beyond the same ratio. Each plot includes discrete data points representing sample averages within bins and a fitted polynomial curve of order four. The horizontal axis denotes bid price ratios from 0.85 to 1.0, and the vertical axis indicates the proportion of winning bids.Discontinuity in winning probability at the 0.95 bid price ratio threshold for paving work
Note(s): Left panel: general competitive bidding. Right panel: designated bidding. The figure illustrates the distribution of winning probabilities. The horizontal axis represents the bid price ratio, while the vertical axis shows the proportion of winning bids. The top of the figure displays the estimated discontinuity and the z-value, testing its significance
Source: Author’s own work