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Cost overrun is ubiquitous in public procurement. We argue that this can be the result of a constraint optimal award … a simple design initially enhances competition in the auction. Moreover, the procurer cannot benefit from using a multi …-dimensional auction, as the optimal scoring rule depends only on the price. …
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We examine free riding for entry deterrence in license auctions with heterogeneous incumbents. We establish the monotonicity of randomized preemptive bidding equilibria: an incumbent with a higher entry-loss rate has greater free-riding incentive, choosing a lower deterring probability. We then...
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