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Heterogeneity-promoting optimal procurement

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  • Ganuza, Juan-Jose
  • Pechlivanos, Lambros

Abstract

When procurement takes place in the presence of horizontally differentiated contractors, the design of the object being procured affects the resulting degree of competition. This paper highlights the interaction between the optimal procurement mechanism and the design choice. Contrary to conventional wisdom, the sponsor's design choice, instead of homogenizing the market to generate competition, promotes heterogeneity.

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File URL: http://www.sciencedirect.com/science/article/B6V84-3YHG85J-K/2/637b259e0e9712a889c078ea1209efa1
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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 67 (2000)
Issue (Month): 1 (April)
Pages: 105-112

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Handle: RePEc:eee:ecolet:v:67:y:2000:i:1:p:105-112

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Web page: http://www.elsevier.com/locate/ecolet

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References

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  1. Juan J. Ganuza & Lambros Pechlivanos, 1998. "Heterogeneity-promoting optimal procurement," Economics Working Papers 377, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 1999.
  2. Brennan, Timothy J, 1996. "Making Economic Sense of the Telecommunications Act of 1996," Industrial and Corporate Change, Oxford University Press, vol. 5(4), pages 941-61.
  3. McAfee, R. Preston & McMillan, John, 1989. "Government procurement and international trade," Journal of International Economics, Elsevier, vol. 26(3-4), pages 291-308, May.
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Cited by:
  1. Ganuza, Juan-Jose & Pechlivanos, Lambros, 2000. "Heterogeneity-promoting optimal procurement," Economics Letters, Elsevier, vol. 67(1), pages 105-112, April.
  2. John Asker & Estelle Cantillon, 2006. "Procurement When Price and Quality Matter," Working Papers 06-24, New York University, Leonard N. Stern School of Business, Department of Economics.
  3. Asker, John & Cantillon, Estelle, 2005. "Optimal Procurement When Both Price and Quality Matter," CEPR Discussion Papers 5276, C.E.P.R. Discussion Papers.

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