Publication detail

Kristoufek, L. & Skuhrovec, J.: Exponential and power laws in public procurement markets

Author(s): prof. PhDr. Ladislav Krištoufek Ph.D.,
PhDr. Ing. Jiří Skuhrovec PhD.,
Type: Articles in journals with impact factor
Year: 2012
Number: 0
ISSN / ISBN:
Published in: EPL (Europhysics Letters) 99, art. 28005 arXiv PDF
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Grants: GACR P402/11/0948 Developing Analytical Framework for Energy Security: Time-Series Econometrics, Game Theory, Meta-Analysis and Theory of Regulation GAUK 5183/2010 (118310) Fractality and multi-fractality of financial markets: methods and applications
Abstract: We analyze for the first time a unique public procurement database, which includes information about a number of bidders for a contract, a final price, an identification of a winner and an identification of a contracting authority for each of more than 40000 public procurements in the Czech Republic between 2006 and 2011, focusing on the distributional properties of the variables of interest. We uncover several scaling laws —the exponential law for the number of bidders, and the power laws for the total revenues and total spendings of the participating companies, which even follows Zipf’s law for the 100 most spending institutions. We propose an analogy between extensive and non-extensive systems in physics and the public procurement market situations. Through an entropy maximization, such analogy yields some interesting results and policy implications with respect to the Maxwell-Boltzmann and Pareto distributions in the analyzed quantities.

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