This paper considers the social costs implied by inefficient allocation of contracts in a first price, sealed bid procurement auction with asymmetric bidders. We adopt a constrained (piecewise linear) strategy equilibrium concept and estimate the structural parameters of the bidders’...

Procurement auctions that assume independent private values (IPV) provide a benchmark for analysis that is readily demonstrated but often unrealistic. Firms who compete for exclusive selling rights normally derive outputs from a highly similar set of inputs which, in turn, allows them to obtain...

Aftermarket social welfare is largely determined by a procurement auction design. Auctions select firms for operating aftermarkets, and auctions may also impose restrictions on aftermarket prices the winner can charge. This paper compares aftermarket social welfare generated by first-price and...

We present a general model of bidding behavior in wildlife corridor auctions. Given (i) some spatial configuration of landowners in a landscape, (ii) the landowners' opportunity costs, and (iii) the value of establishing the corridor, our model predicts individual landowners' bids, overall...

We compare beauty contests with first-price sealed-bid and scoring auctions, using data on public procurement of cleaning services in Swedish municipalities. The lowest submitted and winning bids are similar in all auction designs despite a higher price sensitivity of procurement bureaucrats in...

We provide a comparison of bidding behavior between multi-round and single-round auctions considering bid lettings for asphalt construction contracts that are known to have primarily private costs. Using a reduced-form differenc-in-difference approach as well as the nonparametric estimation...

This paper studies multi-attribute auctions in which a buyer seeks to procure a complex good and evaluate offers using a quasi-linear scoring rule. Suppliers have private information about their costs, which is summarized by a multi-dimensional type. The scoring rule reduces the multidimensional...

When procurement contracts are awarded through competitive tendering participating firms commit ex ante to fulfil a set of contractual duties. However, selected contractors may find profitable to renege ex post on their promises by opportunistically delivering lower quality standards. In order...

We consider a budget-constrained mechanism designer who selects an optimal set of projects to maximize her utility. A project's cost is private information and its value for the designer may vary. In this allocation problem, the selection of projects - both which and how many - is endogenously...

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...