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| Author: | Domberger, S. Hall, C. Li, A. |
| Title: | The determinants of price and quality in competitively tendered contracts |
| Journal: | Economic Journal
1995 : NOV, VOL. 105:433, p. 1454-1470 |
| Index terms: | ECONOMICS PRICES QUALITY |
| Language: | eng |
| Abstract: | Traditional analysis of the impact of competitive tendering on service provision has focused on costs and prices. Critics have argued that price reductions lead to lower quality. The authors tested this hypothesis using a two equation econometric model, with data from a panel of 61 cleaning services contracts. The results indicated that while competition reduced price significantly, quality of service was maintained or even enhanced. The effect of competition turned out to be greater on prices than on quality. |
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