This paper investigates firms' incentives to invest in cost reduction in the first price sealed bid auction, a format largely used for procurement. Two central features of the model are that we allow firms to be heterogeneous and that investment is observable. We find that firms will tend to...

We investigate firms' incentives for cost reduction in the first price sealed bid auction, a format largely used for procurement. A central feature of the model is that we allow firms to be heterogeneous. Though private value first price auctions are not games with monotonic best responses, we...

This article examines how professional female tennis players react to (a) prize incentives and (b) heterogeneity in ex ante players' abilities. It is found that a larger prize spread encourages women to increase effort, even when controlling for many tournament and player characteristics....