How to subcontract?
Firms compete for a contract and subcontract part of the work. If subcontracting takes place before the award of the contract, the revenue equivalence result breaks down, as subcontractors anticipate that their bids influence the probability of the firm winning the contract. Properties of the optimal subcontracting mechanism are discussed.
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References listed on IDEAS
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- François Marechal & Pierre-Henri Morand, 2003.
"Pre vs. post-award subcontracting plans in procurement bidding,"
- Marechal, Francois & Morand, Pierre-Henri, 2003. "Pre vs. post-award subcontracting plans in procurement bidding," Economics Letters, Elsevier, vol. 81(1), pages 23-30, October.
- François Marechal & Pierre-Henri Morand, 2003. "Pre vs. post-award subcontracting plans in procurement bidding," Post-Print hal-01313446, HAL.
- Morton I. Kamien & Lode Li & Dov Samet, 1989. "Bertrand Competition with Subcontracting," RAND Journal of Economics, The RAND Corporation, vol. 20(4), pages 553-567, Winter.
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