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Incomplete Contracting and Target-Cost Pricing

Bös, Dieter - University of Bonn, Germany - 1996

Target-cost pricing has been a widely applied formula in defence contracting. If this type of pricing arrangement is chosen, the seller's ex-post profit consists of a fixed payment plus some share of the cost overrun, that is the difference between an ex--ante agreed estimation of the production...

Persistent link: https://www.econbiz.de/10004968184

Holdups, Quality Choice, and the Achilles' Heel in Government Contracting

Bös, Dieter; Lülfesmann, Christoph - University of Bonn, Germany - 2001

This paper investigates a procurement relationship between a welfare-oriented government and a private supplier. The … procurement where the buyer maximizes profit rather than welfare. We identify the government's welfare objective as its Achilles …' heel: equilibrium trade prices differ in public and private procurement, and private governance can lead to more efficient …

Persistent link: https://www.econbiz.de/10004968417

Self-Correcting Mechanisms in Public Procurement: Why Award and Contract Should be Separated

Bös, Dieter; Kolmar, Martin - University of Bonn, Germany

In public procurement a temporal separation of award and actual contracting can frequently be observed. In this paper … we give an explanation for this institutional setting. For incomplete procurement contracts we show that such a … post-award, pre-contract rent-seeking activities also increase efficiency. This is always the case if the procurement …

Persistent link: https://www.econbiz.de/10005032222

Incentives for information acquisition in firms

Will, Heide C. U. - University of Bonn, Germany - 1996

This paper investigates the effects of information acquisition in the light of two different organisational structures in various competitive settings. While the intuitive expectation that growing uncertainty raises the incentives to gather information can be confirmed, a changing organisational...

Persistent link: https://www.econbiz.de/10004968180

Bertrand equilibrium in a differentiated duopoly

Bester, Helmut - University of Bonn, Germany - 1988

Persistent link: https://www.econbiz.de/10004989580

Dominance or Maximin: How to Solve an English Auction

Kamecke, Ulrich - University of Bonn, Germany - 1993

It is widely believed that the English auction is solved after the dominated strategies are eliminated. This opinion is formally confirmed only for one "ascending clock" auction and can not be generalized for most other English auctions. In this paper I show that the formal argument which is...

Persistent link: https://www.econbiz.de/10004968187

Reserve prices in auctions as reference points

Rosenkranz, Stephanie; Schmitz, Patrick W. - University of Bonn, Germany - 2005

We consider second-price and first-price auctions in the symmetric independent private values framework. We modify the standard model by the assumption that the bidders have reference-based utility, where a publicly announced reserve price has some influence on the reference point. It turns out...

Persistent link: https://www.econbiz.de/10004989626

Strategic Trade Policy under Asymmetric Information about Market Demand

Schuhmacher, Frank - University of Bonn, Germany

This paper examines strategic trade policy with unilateral intervention under asymmetric information about market demand. In an international Cournot-duopoly, the choice of the domestic country's export subsidy signals the domestic country's private information to the foreign firm. It is shown...

Persistent link: https://www.econbiz.de/10004968138

Costly Acquisition of Information with Incomplete Markets

Laitenberger, Marta - University of Bonn, Germany - 1996

In this paper we introduce markets for information about assets' payoffs in a two-period General Equilibrium Incomplete Markets Model. We consider asymmetric Walrasian equilibria with endogenous information allocations and analyze the interaction between demand for information and equilibrium...

Persistent link: https://www.econbiz.de/10004968141

Seniority Structure and Financial Intermediation

Schuhmacher, Joachim - University of Bonn, Germany - 1998

The financial structure of firms is diverse. Firms issue many different types of financial claims. This article focuses on the seniority structure of debt contracts. It is outlined under what conditions firms can improve the outcome of their financial decisions by choosing seniority structure....

Persistent link: https://www.econbiz.de/10004968158