The Effect of Electronic Auctions on Competition

In 2004 the EU put into effect the electronic auction method to increase competitiveness in public procurements. Despite its positive effects on competitiveness usage rates remain lower than expected. In this context this research aims to find out how electronic auctions affect the competitiveness and why usage rates remain lower than expected. In the research two empirical models are designed. The first model is about the total effect of the electronic auction method on competitiveness and shows that it increases the competitiveness significantly. And the second model presents that electronic auction method surprisingly decreases the number of offers in procurements. It is also observed that this method boosts the attractiveness of procurements; however it extends the process and this extension has negative effects on competition. Finally despite some disadvantages of the electronic auction method the advantages of using the electronic auction method in public procurements outweigh the disadvantages and it improves the competition.