This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

The Contractors' Game

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Kevin Lang
Robert W. Rosenthal

Additional information is available for the following registered author(s):

Abstract

We develop a symmetric-information auction model of multiproject contracting with costly bidding and increasing marginal performance costs. When there are many potential contractors or only one job, there is a zero-expected-profit symmetric equilibrium in mixed strategies. The winning bid at this equilibrium tends to rise (perversely) with the number of contractors. When there are only two potential bidders and either two or three jobs, multiple bids of a contractor at equilibrium are negatively correlated with each other. The resulting equilibrium outcome tends to divide the market between the contractors in a manner that suggests anticompetitive behavior despite the absence of any collusion.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://links.jstor.org/sici?sici=0741-6261%28199123%2922%3A3%3C329%3ATCG%3E2.0.CO%3B2-T&origin=repec
File Format: application/pdf
File Function: full text
Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Article provided by The RAND Corporation in its journal RAND Journal of Economics.

Volume (Year): 22 (1991)
Issue (Month): 3 (Autumn)
Pages: 329-338
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:rje:randje:v:22:y:1991:i:autumn:p:329-338

Contact details of provider:
Web page: http://www.rje.org

Order Information:
Web: http://gemini.econ.umd.edu/cgi-bin/rje_online.cgi

For technical questions regarding this item, or to correct its listing, contact: ().

Related research
Keywords:

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Kaplan, Todd & Sela, Aner, 2003. "Auctions with Private Entry Costs," CEPR Discussion Papers 4080, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  2. Gary Biglaiser & Nikolaos Vettas, 2007. "Dynamic price competition with capacity constraints and strategic buyers," Working Papers 24, Portuguese Competition Authority. [Downloadable!]
  3. In Lee & Kyungdong Hahn, 2002. "Bid-Rigging in Auctions for Korean Public-Works Contracts and Potential Damage," Review of Industrial Organization, Springer, vol. 21(1), pages 73-88, August. [Downloadable!] (restricted)
  4. Kevin Lang & Sumon Majumdar, 2003. "The Pricing of Job Characteristics When Markets Do Not Clear: Theory and Implications," NBER Working Papers 9911, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Srabana Gupta, 2001. "The Effect of Bid Rigging on Prices: A Study of the Highway Construction Industry," Review of Industrial Organization, Springer, vol. 19(4), pages 451-465, December. [Downloadable!] (restricted)
  6. Elmar Wolfstetter & Walter Elberfeld, 1997. "A Dynamic Model of Bertrand Competition with Entry," Microeconomics 9701003, EconWPA. [Downloadable!]
    Other versions:
  7. Randall D. Cebul & James B. Rebitzer & Lowell J. Taylor & Mark E. Votruba, 2008. "Unhealthy Insurance Markets: Search Frictions and the Cost and Quality of Health Insurance," NBER Working Papers 14455, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Peter Cramton, 1995. "Money Out of Thin Air: The Nationwide Narrowband PCS Auction," Papers of Peter Cramton 95jems, University of Maryland, Department of Economics - Peter Cramton, revised 09 Jun 1998. [Downloadable!]
    Other versions:
  9. Vijay Krishna & Robert Rosenthal, 1995. "Simultaneous Auctions with Synergies," Game Theory and Information 9503004, EconWPA. [Downloadable!]
    Other versions:
  10. Maarten C.W. Janssen & Eric Rasmusen, 1998. "Bertrand Competition under Uncertainty," Tinbergen Institute Discussion Papers 98-083/1, Tinbergen Institute. [Downloadable!]
    Other versions:
  11. Cuihong Fan & Elmar Wolfstetter, 2006. "Procurement with Costly Bidding, Optimal Shortlisting, and Rebates," Discussion Papers 166, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
    Other versions:
  12. Robert H. Porter & J. Douglas Zona, 1992. "Detection of Bid Rigging in Procurement Auctions," NBER Working Papers 4013, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  13. Israel J. Muñoz & Elena Huergo, 2005. "Entrada y competencia en los servicios de telecomunicaciones," Industrial Organization 0504002, EconWPA. [Downloadable!]
    Other versions:
  14. Biglaiser, Gary & Vettas, Nikolaos, 2004. "Dynamic Price Competition with Capacity Constraints and Strategic Buyers," CEPR Discussion Papers 4315, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Statistics
Access and download statistics

Did you know? There is a FAQ (frequently asked questions).

This page was last updated on 2009-11-13.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.