Burguet, Roberto; Perry, Martin K. - Barcelona Graduate School of Economics (Barcelona GSE) - 2003
We consider a model of preference in an asymmetric procurement auction with two suppliers. The buyer can award the …-of-first-refusal. The preferred supplier may be an independent firm who has paid for the preference or may be a subsidiary of the buyer …. Preference creates an allocative distortion that is qualitatively different than the distortion that arises in an asymmetric …