The legislation in the European Union (EU) regarding contracts to be awarded to third parties allows for a free choice by public agencies between the open and restricted procedure. Empirical evidence shows a high variance in the preference for one of the procedures exists between countries. This preference may be based on cultural phenomena only. Here we develop a quantitative model to calculate which procedure is the most economic. With insights from this model guidelines are given for an efficient policy regarding the choice for the open or restricted award procedure.
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