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Economic Incentives and the Defense Procurement Process

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Author Info
William P. Rogerson
Abstract

This paper descrives some of the insights that the economic theory of incentives can contribute to defense procurment policy analysis. It descrives the underlying incentive problems that shape the defense procurement problem, the nature of current institutions and how they affect actors' behavior, and possible directions for improving the procurement process suggested by viewing it as a solution to a complex set of incentive problems. Incentive problems between government and defense firms and incentive problems within government are both considered.

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File URL: http://www.kellogg.northwestern.edu/research/math/papers/1078.pdf
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Paper provided by Northwestern University, Center for Mathematical Studies in Economics and Management Science in its series Discussion Papers with number 1078.

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Date of creation: Dec 1993
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Handle: RePEc:nwu:cmsems:1078

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Web page: http://www.kellogg.northwestern.edu/research/math/
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  1. Rogerson, William P, 1989. "Profit Regulation of Defense Contractors and Prizes for Innovation," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1284-1305, December. [Downloadable!] (restricted)
  2. Tirole, Jean, 1986. "Procurement and Renegotiation," Journal of Political Economy, University of Chicago Press, vol. 94(2), pages 235-59, April. [Downloadable!] (restricted)
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  3. Rogerson, William P, 1990. "Quality vs. Quantity in Military Procurement," American Economic Review, American Economic Association, vol. 80(1), pages 83-92, March. [Downloadable!] (restricted)
  4. Anthony G. Bower & Kent Osband, 1991. "When More is Less: Defense Profit Policy in a Competitive Environment," RAND Journal of Economics, The RAND Corporation, vol. 22(1), pages 107-119, Spring. [Downloadable!] (restricted)
  5. Kirk Monteverde & David J. Teece, 1982. "Supplier Switching Costs and Vertical Integration in the Automobile Industry," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 206-213, Spring. [Downloadable!] (restricted)
  6. Tan, Guofu., 1989. "Entry and R&D Costs in Competitive Procurements and Contracting," Working Papers 708, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
  7. Michael H. Riordan & David E.M. Sappington, 1989. "Second Sourcing," RAND Journal of Economics, The RAND Corporation, vol. 20(1), pages 41-58, Spring. [Downloadable!] (restricted)
  8. Kovacic, William E, 1991. "Commitment in Regulation: Defense Contracting and Extensions to Price Caps," Journal of Regulatory Economics, Springer, vol. 3(3), pages 219-40, September.
  9. Victor P. Goldberg, 1976. "Regulation and Administered Contracts," Bell Journal of Economics, The RAND Corporation, vol. 7(2), pages 426-448, Autumn. [Downloadable!] (restricted)
  10. Keith J. Crocker & Kenneth J. Reynolds, 1993. "The Efficiency of Incomplete Contracts: An Empirical Analysis of Air Force Engine Procurement," RAND Journal of Economics, The RAND Corporation, vol. 24(1), pages 126-146, Spring. [Downloadable!] (restricted)
  11. Tan, Guofu., 1989. "Incentive Procurement Contracts with Costly R&D," Working Papers 702, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
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