This paper provides an empirical analysis of the effect of competition for road maintenance contracts in 'thin' markets (markets with few participants). We study competition in public procurement auctions for road maintenance in Norway, and look to the effects of entry on prices. We provide evidence of a positive impact of entry on bid prices. This entry effect comes on top of the general effect of the number of bidders in the market. We show that the number of bidders is positively affected by the size of the auction.
Arve et al. (Sat,) studied this question.