We consider a model of preference in an asymmetric procurement auction with two suppliers. The buyer can award the contract to a preferred supplier at the bid of a competing supplier. As such, the preferred supplier has a right-of-first-refusal. The preferred supplier may be an independent firm...

This paper examines preference in procurement with asymmetric suppliers. The preferred supplier has a right-of-first-refusal to obtain the contract at a price equal to the bid of a competing supplier. Despite the inefficiency created by the right-of-first-refusal, preference increases the joint...

In a procurement setting, this paper examines agreements between a buyer and one of the suppliers which would increase their joint surplus. The provisions of such agreements depend on the buyers ability to design the rules of the final procurement auction. When the buyer has no such ability,...