Figure A3.
The figure includes two panels illustrating how bid price ratios affect the proportion of winning bids in high market concentration conditions, represented by high Herfindahl-Hirschman Index values. Panel a, General competitive bidding, shows an estimated discontinuity of negative 0.322 and z-value of negative 0.814, with a clear drop around the bid price ratio of 0.95. Panel b, Designated bidding, has a sharper decline with an estimated discontinuity of negative 0.865 and z-value of negative 6.602. Both plots display sample averages as dots and a fourth-order polynomial fit line. The y-axis indicates the proportion of winning bids, and the x-axis shows bid price ratio values between 0.85 and 1.0, with a vertical line marking the cutoff point.High markets (HHI > 0.9): Verification of the discontinuity at 0.95
Note(s): Left panel: general competitive bidding. Right panel: designated bidding. The interpretation of the figure is the same as in Figure 4
Source: Author’s own work