We investigate firms' incentives for cost reduction in the first price sealed bid auction, a format largely used for procurement. A central feature of the model is that we allow firms to be heterogeneous. Though private value first price auctions are not games with monotonic best responses, we...

This paper investigates firms' incentives to invest in cost reduction in the first price sealed bid auction, a format largely used for procurement. Two central features of the model are that we allow firms to be heterogeneous and that investment is observable. We find that firms will tend to...

This paper investigates firms' incentives to invest in cost reduction in the first price sealed bid auction, a format largely used for procurement. Two central features of the model are that we allow firms to be heterogeneous and that investment is observable. We find that firms will tend to...

This study examines the use of incentive mechanisms for employees in export and investment promotion agencies intended to improve their performance. It briefly describes these organizations and presents the contributions from economic theory that are useful to understand the agency problems that...

In many auction settings, there is favoritism: the seller's welfare depends positively on the utility of a subset of potential bidders. However, laws or regulations may not allow the seller to discriminate among bidders. We find the optimal nondiscriminatory auction in a private value,...

We compare equilibria with sequential and simultaneous moves under homogeneous-good Bertrand competition when unit costs are private information. Under an alternative interpretation, we examine the consequences of awarding a right of first refusal in a first-price procurement auction with...