Communication of preferences in contests for contracts
AbstractThis paper models a contest where several sellers compete for a contract with a single buyer. There are several styles of possible designs with a subset of them preferred by the buyer. We examine what happens when the buyer communicates information about his preferences. If the sellers are unable to change their style, then there is no effect on the welfare of the sellers. If the sellers are able to make adjustments, extra information may either boost or damage the sellers’ profits. While the chance that there will be a proposal of a style preferred by the buyer cannot decrease, the buyer’s surplus may increase or decrease. Copyright Springer-Verlag 2012
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Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 51 (2012)
Issue (Month): 2 (October)
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Web page: http://link.springer.de/link/service/journals/00199/index.htm
Other versions of this item:
- Kaplan, Todd R, 2008. "Communication of Preferences in Contests for Contracts," MPRA Paper 18696, University Library of Munich, Germany, revised 08 Aug 2009.
- H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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