In public procur ement 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,...

Suppliers who are better informed than purchasers, such as physicians treating insured patients, often have discretion over what to provide. This paper shows how, when the purchaser observes what is supplied but can observe neither recipient type nor the actual cost incurred, optimal provision...

In many auctions, the auctioneer is an agent of the seller. This invites corruption. We propose a model of corruption in which the auctioneer orchestrates bid rigging by inviting a bidder to either lower or raise his bid, whichever is more profitable. We characterize equilibrium bidding in...