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Bidding for MnDOT Highway Repair Contracts: An Empirical Analysis.

Minnesota spends 9% of its annual budget on highway repair and maintenance. Patrick Bajari (Department of Economics), in collaboration with Greg Lewis (Department of Economics, Harvard University) and Diwakar Gupta (Department of Mechanical Engineering, University of Minnesota), will empirically study bids that highway contractors submit for contracts that the Minnesota Department of Transportation (MnDOT) awards. Working with MnDOT and leading general contractors in Minnesota, they will develop econometric methods to study unit prices (an important aspect of the bidding data that has largely been ignored by earlier researchers), quantify potential inefficiencies in the industry, and propose improvements in the current bidding systems. This project is a continuation of earlier empirical research by Bajari on bidding by highway contractors in Minnesota.

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Edward Goetz Director, CURA (612) 624-8737