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Per-unit bidding rules and buyer under-performance in natural resource sales


  • Frank Rusco
  • W. David Walls


In this article, we examine the role of per-unit bidding rules on firm-level contractual performance. In particular, we test the hypothesis that buyers will act on incentives to under-perform when bids are accepted in per-unit form. The empirical application uses data from per-unit auction sales of US Forest Service timber. The statistical analysis indicates that buyers systematically undercut when per-unit bids exceed the value of individual units of timber.

Suggested Citation

  • Frank Rusco & W. David Walls, 2007. "Per-unit bidding rules and buyer under-performance in natural resource sales," Applied Economics Letters, Taylor & Francis Journals, vol. 15(2), pages 79-83.
  • Handle: RePEc:taf:apeclt:v:15:y:2007:i:2:p:79-83
    DOI: 10.1080/13504850600705901

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