We find a necessary and sufficient condition such that a distributional upgrade on a seller’s cost implies a lower expected procurement cost for a buyer. We also show that even under the strongest assumption about this upgrade made in the literature so far, the seller can be worse off, even if...

In this paper we characterize the optimal procurement mechanism and the investment level for an environment where two projects must be adjudicated sequentially, and the winner of the first project has the opportunity to invest in a distributional upgrade for its costs in the second project. We...