Avoidance of Risk from the Contracting Authorities:
Avoidance of Risk from the Contracting Authorities:

Public Procurement Case Study

Summary/Abstract: The article deals with an empiric analysis of behaviour of contracting authorities when tendering public contracts. In the context of theories dealing with rational, imperfectly rational and rationally inattentive behaviour of agents, it tries to describe the problem of avoiding risk by the contracting authorities in further detail. Theories observing behaviour of bureaucracy – no matter how well they are reasoned – mostly meet the problem of empiric verifiability. In this case, the authors try to fill the gap using an empiric analysis where it is worked with real data of public contracts from 2010 – 2014. We can consider the main findings to be the fact that public contracting authorities prefer strategies that are based on a reduction of risk of conflicts with the regulator. These strategies are chosen mainly based on signals of behaviour of central authorities, rather than based on the effort of gaining the most informative strategy. However, the final result is the same. In the authors’ opinion, the aversion to risk by the contracting authorities, which is enforced by the public policy in this field, plays the major role.

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