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Cost overrun is ubiquitous in public procurement. We argue that this can be the result of a constraint optimal award procedure when the procurer cannot commit not to renegotiate. If cost differences are more pronounced for more complex designs, it is optimal to fix a simple design ex ante and to...
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For the procurement of complex goods the early exchange of information is important to avoid costly renegotiation ex … auctions if sellers are likely to have superior information about possible design improvements, if renegotiation is costly, and …
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For the procurement of complex goods the early exchange of information is important to avoid costly renegotiation. If …). Bilateral negotiations are superior if potential design improvements are important, if renegotiation is particularly costly, and …
Persistent link: https://www.econbiz.de/10011596132
inefficiencies: inefficient renegotiation, inefficient production and inefficient design. We derive the welfare optimal direct …
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are more pronounced for a fancy than a standard design, it is optimal to fix the standard design ex ante. If renegotiation …
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