suppliers. We also compare other common contests, in particular, fixed-prize tournaments and auctions. Like bonus tournaments …, auctions implement the socially optimal diversity, but usually with higher rents for the suppliers. Fixed-prize tournaments … implement insufficient diversity, but may nevertheless be preferred by the buyer to auctions because of lower supplier rents. …

In procurement auctions, bidders are usually better informed about technical, financial, or legal aspects of the goods … and services procured. Therefore, the buyer may include a dialogue in the procurement procedure which enables the … question of the value added of letting the sourcing process consist of both an auction and a negotiation stage, theoretically …