Application Period in Reverse Auctions

The duration to apply for participation in auctions affects entry costs and eventually the allocation and prices of contracts. The role of the application period is studied using Russian public procurement data on gasoline in 2011-2013. By relying on formal rules on the determination of the application period, I find that longer periods enhance competition and lead to price reductions. Moreover, I show that public buyers avoid long application periods. They shorten the period if they need gasoline immediately but I further argue that it facilitates favoritism. Finally, evidence is provided of collusion sustaining favoritism