The procurement of complex projects is often plagued by large cost overruns. One important reason for these additional … inefficiencies: inefficient renegotiation, inefficient production and inefficient design. We derive the welfare optimal direct …

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 … post. We show that this is achieved by bilateral negotiations but not by auctions. Negotiations strictly outperforms …

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 …

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 … post. We show that this is achieved by bilateral negotiations but not by auctions. Negotiations strictly outperforms …

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 … post. We show that this is achieved by bilateral negotiations but not by auctions. Negotiations strictly outperforms …

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 …

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 … post. We show that this is achieved by bilateral negotiations but not by auctions. Negotiations strictly outperforms …

Cost overrun is ubiquitous in public procurement. We argue that this can be the result of a constraint optimal award …

Cost overrun is ubiquitous in public procurement. We argue that this can be the result of a constrained optimal award … are more pronounced for a fancy than a standard design, it is optimal to fix the standard design ex ante. If renegotiation …

Cost overrun is ubiquitous in public procurement. We argue that this can be the result of a constrained optimal award … are more pronounced for a fancy than a standard design, it is optimal to fix the standard design ex ante. If renegotiation …