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• W636277140 abstract "Pooled procurement has an important role in reducing acquisition prices of goods. A pool of buyers, which aggregates demand for its members, increases bargaining power and allows suppliers to achieve economies of scale and scope in the production. Such aggregation demand effect lowers prices paid for buyers. However,  when a buyer with a good reputation for paying suppliers in a timely manner is joined in the pool by a buyer with bad reputation may have its price paid increased due to the credit risk effect on prices. This will happen because prices paid in a pooled procurement should reflect the (higher) average buyers' credit risk. Using a data set on Brazilian public purchases of pharmaceuticals and medical supplies, we find evidence supporting both effects. We show that the prices paid by public bodies in Brazil are lower when they buy through pooled procurement than individually. On the other hand, federal agencies (i.e.good buyers) pay higher prices for products when they are joined by state agencies (i.e. bad buyers) in a pool. Such evidence suggests that pooled procurement should be carefully designed to avoid that prices paid increase for its members." @default.
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• W636277140 date "2012-09-12" @default.
• W636277140 modified "2023-09-27" @default.
• W636277140 title "Demand aggregation and credit risk effects in pooled procurement: evidence from the Brazilian public purchases of pharmaceuticals and medical supplies" @default.
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