Arozamena, Leandro; Cantillon, Estelle - In: Review of Economic Studies 71 (2004) 1, pp. 1-18
This paper investigates firms' incentives to invest in cost reduction in the first price sealed bid auction, a format largely used for procurement. Two central features of the model are that we allow firms to be heterogeneous and that investment is observable. We find that firms will tend to...
