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This paper considers the social costs implied by inefficient allocation of contracts in a first price, sealed bid procurement auction with asymmetric bidders. We adopt a constrained (piecewise linear) strategy equilibrium concept and estimate the structural parameters of the bidders'...
Persistent link: https://www.econbiz.de/10010321543
We investigate the relationship between the time politicians stay in office and the functioning of public procurement. To this purpose, we collect a data set on the Italian municipal governments and all the procurement auctions they administered between 2000 and 2005. Identification is achieved...
Persistent link: https://www.econbiz.de/10010269756
Discriminatory programs that favor local and small firms in government procurement are common in many countries. This paper studies the long-run impact of procurement discrimination on market structure and future competition in industries where learning-by-doing makes incumbent firms more...
Persistent link: https://www.econbiz.de/10010288456
We compare two commonly used mechanisms in procurement: auctions and negotiations. The execution of the procurement mechanism is delegated to an agent of the buyer. The agent has private information about the buyer's preferences and may collude with one of the sellers. We provide a precise...
Persistent link: https://www.econbiz.de/10010291548
Aftermarket social welfare is largely determined by a procurement auction design. Auctions select firms for operating aftermarkets, and auctions may also impose restrictions on aftermarket prices the winner can charge. This paper compares aftermarket social welfare generated by first-price and...
Persistent link: https://www.econbiz.de/10014469623
We present a general model of bidding behavior in wildlife corridor auctions. Given (i) some spatial configuration of landowners in a landscape, (ii) the landowners’ opportunity costs, and (iii) the value of establishing the corridor, our model predicts individual landowners’ bids, overall...
Persistent link: https://www.econbiz.de/10011662534
Procurement auctions that assume independent private values (IPV) provide a benchmark for analysis that is readily demonstrated but often unrealistic. Firms who compete for exclusive selling rights normally derive outputs from a highly similar set of inputs which, in turn, allows them to obtain...
Persistent link: https://www.econbiz.de/10011666758
Competitive bidding (as auctions) is commonly used to procure goods and services. Public buyers are often mandated by law to adopt competitive procedures to ensure transparency and promote full competition. Recent theoretical literature, however, suggests that open competition can perform poorly...
Persistent link: https://www.econbiz.de/10010279400
We consider procurement of an innovation from heterogeneous sellers. Innovations are random but depend on unobservable effort and private information. We compare two procurement mechanisms where potential sellers first bid in an auction for admission to an innovation contest. After the contest,...
Persistent link: https://www.econbiz.de/10010334102
The present note analyzes the Simultaneous Ascending Bid Auction with arbitrarily many bidders with decreasing marginal valuations under complete information. We show that the game is solvable by iterated elimination of weakly dominated strategies if the efficient allocation assigns at least one...
Persistent link: https://www.econbiz.de/10010261069