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! ]

Procurement Auctions with Pre-award Subcontracting

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Jun Nakabayashi
Abstract

To be the lowest bidder in procurement auctions, prime contractors commonly solicit subcontract bids at the bid preparation stage. A remarkable feature of the subcontract competition is that "winning is not everything"; the lowest subcontractor gets a job conditional on his prime contractor's successful bid. This paper makes the first attempt to establish a model for such pre-award subcontract competitions included in procurement auctions. I find that subcontractors strategically provide larger discounts on their bids in response to increasing competition among prime contractors. I thus clarify that the behavior results in an endogenous downward shift in the distribution of bidders' private information in the downstream auction as the number of rivals increases, or the reservation price drops. The result has a striking impact on the analysis of optimal reservation price and empirical identification of the bidder's cost distribution in procurement auctions.

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://www.econ.tsukuba.ac.jp/RePEc/2009-013.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba in its series Tsukuba Economics Working Papers with number 2009-013.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: Oct 2009
Date of revision:
Handle: RePEc:tsu:tewpjp:2009-013

Contact details of provider:
Postal: 1-1-1 Tennodai, Tsukuba, Ibaraki 305-8571
Web page: http://www.econ.tsukuba.ac.jp/
More information through EDIRC

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

Related research
Keywords:

This paper has been announced in the following NEP Reports:

Statistics
Access and download statistics

Did you know? RePEc stands for Research Papers in Economics.

This page was last updated on 2010-3-16.


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.