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Competition for procurement shares

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  • Alcalde, José
  • Dahm, Matthias

Abstract

We propose a new procurement procedure that allocates shares of the total amount to be procured depending on the bids of suppliers. Among the properties of the mechanism are the following: (i) Bidders have an incentive to participate in the procurement procedure, as equilibrium payoffs are strictly positive. (ii) The mechanism allows variations in the extent to which affirmative action objectives, like promoting local industries, are pursued. (iii) Surprisingly, even while accomplishing affirmative action goals, procurement expenditures might be lower than under a standard auction format.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 80 (2013)
Issue (Month): C ()
Pages: 193-208

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Handle: RePEc:eee:gamebe:v:80:y:2013:i:c:p:193-208

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Web page: http://www.elsevier.com/locate/inca/622836

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Keywords: Procurement auction; Affirmative action;

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Cited by:
  1. Dahm, Matthias & Esteve, Patrícia,, 2013. "Affirmative Action through Extra Prizes," Working Papers 2072/222197, Universitat Rovira i Virgili, Department of Economics.

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