Should the government procure equipment for its agencies or let them run their own procurment auctions? Suppose the agency has private information about product quality, but is inclined to favour local suppliers. Decentralization saves bureaucracy and "agency costs", but leads to biased...

Should the government procure equipment for its agencies or let them run their own procurement auctions? Suppose the agency has private information about product quality, but is inclined to favor local suppliers. Decentralization saves bureaucracy and "agency costs" (costs tied to truthful...

In procurement auctions with a fixed number of bidders there is a tradeoff between cost efficiency and rent extraction. An optimal mechanism, therefore, entails distortions of effort. If potential suppliers must sink an entry investment before they can participate in the auction, then decreasing...

Consider an auction in which potential bidders must sink an entry investment before learning their values. Suppose the auction designer can make the bidders learn their value before entry. Such early information will induce screening of high-value bidders, and it will give rise to information...