The paper analyses the impact of incompetence and corruption in procurement auctions. The government plans to build a public good of a certain quality. To implement this plan the government conducts a procurement auction where a firm that quotes the lowest bid wins the contract (subject to the...

This paper analyses the impact of favouritism and corruption in procurement auctions in an emerging economy. There are two firms: one is the favoured one and the other is not the favoured one. The firm that wins the contract needs to supply a good that meets a certain quality standard failing...