Inefficient R&D in public procurement : negative consequences of a separation between award and actual contract

Dieter Bös

In public procurement a temporal separation between award and actual contract allows private entrepreneurs who did not get the award to sue to become contractor. Hence, not only the award-winning entrepreneur, but also the losers will engage in relationship-specific investments. Unfortunately, in such a situation it is impossible to find fixed prices which guarantee the achievement of both efficient trade and efficient investment.

MoreLess

Year of publication:	1999
Authors:	Bös, Dieter
Publisher:	Munich : Univ., Center for Economic Studies
Subject:	Ausschreibung \| Competitive tendering \| Öffentlicher Auftrag \| Public contract \| Unvollständiger Vertrag \| Incomplete contract \| Theorie der Unternehmung \| Theory of the firm \| Rent-Seeking \| Rent seeking \| Prinzipal-Agent-Theorie \| Agency theory \| Allokationseffizienz \| Allocative efficiency \| Theorie \| Theory