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Auctions vs. negotiations : the effects of inefficient renegotiation

Herweg, Fabian; Schmidt, Klaus M. - 2014 - This version: November 25, 2014

For the procurement of complex goods the early exchange of information is important to avoid costly renegotiation ex post. We show that this is achieved by bilateral negotiations but not by auctions. Negotiations strictly outperforms auctions if sellers are likely to have superior information...

Persistent link: https://www.econbiz.de/10010439677

Optimal procurement contracts with pre-project planning

Krähmer, Daniel; Strausz, Roland - 2010

hazard. To model the procurer's roblem, we extend a standard sequential screening model to endogenous information acquisition … with moral hazard. The optimal contract displays systematic distortions in information acquisition. Due to a rent effect …, adverse selection induces too much information acquisition to prevent cost overruns and too little information acquisition to …

Persistent link: https://www.econbiz.de/10003935679

Innovation contests with entry auction

Giebe, Thomas - 2010

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/10003935696

Optimal use of rewards as commitment device when bidding is costly

Hu, Luke - 2012

This paper considers procurement auctions with costly bidding when the auctioneer is unable to commit himself to restrict the number of bidders. The auctioneer can, however, offer a financial reward to be paid to every short-listed bidders as an indirect commitment device. Rewards for...

Persistent link: https://www.econbiz.de/10009571029

How to allocate research (and other) subsidies

Ensthaler, Ludwig; Giebe, Thomas - 2011

A budget-constrained buyer wants to purchase items from a short-listed set. Items are differentiated by observable quality and sellers have private reserve prices for their items. The buyer's problem is to select a subset of maximal quality. Money does not enter the buyer's objective function,...

Persistent link: https://www.econbiz.de/10008936390

Merger efficiency and managerial incentives

Kräkel, Matthias; Müller, Daniel - 2013

information about suitable merger targets and to manage the merged corporation in case of an acquisition. Our results show that …

Persistent link: https://www.econbiz.de/10010198514

Procurement and predation : dynamic sourcing from financially constrained suppliers

Arve, Malin - 2013

This paper studies the interaction between financially constrained and financially strong firms on a procurement market. It characterizes and discusses a procurement agency's optimal response when faced with financially asymmetric firms. By considering a dynamic setting, both present and future...

Persistent link: https://www.econbiz.de/10010200427

Transparency in buyer-determined auctions : should quality be private or public?

Stoll, Sebastian; Zoettl, Gregor - 2014

We study non-binding procurement auctions where both price and non-price characteristics of bidders matter for being awarded a contract. The outcome of such auctions critically depends on how information is distributed among bidders during the bidding process. As we show theoretically, whether...

Persistent link: https://www.econbiz.de/10010358744

Procurement of goods and services : scope and government

Wolfstetter, Elmar - 2005

Persistent link: https://www.econbiz.de/10010365907

Corruption in procurement auctions

Lengwiler, Yvan; Wolfstetter, Elmar - 2006

We review different kinds of corruption that have been observed in procurement auctions and categorize them. We discuss means to avoid corruption, by choice of preferable auction formats, or with the help of technological tools, such as secure electronic bidding systems. Auctions that involve...

Persistent link: https://www.econbiz.de/10010343955