IDEAS home Printed from https://ideas.repec.org/p/col/000091/011006.html
   My bibliography  Save this paper

Information Provision in Procurement Auctions

Author

Listed:
  • Joaquin Coleff

    ()

  • Daniel Garcia

    ()

Abstract

Abstract: We analyze the optimal provision of information in a procurement auction with horizontally diff erentiated goods. The buyer has private information about her preferred location on the product space and has access to a costless communication device. A seller who pays the entry cost may submit a bid comprising a location and a minimum price. We characterize the optimal information structure and show that the buyer prefers to attract only two bids. Further, additional sellers are inefficient since they reduce total and consumer surplus, gross of entry costs. We show that the buyer will not nd it optimal to send public information to all sellers. On the other hand, she may pro fit from setting a minimum price and that a severe hold-up problem arises if she lacks commitment to set up the rules of the auction ex-ante.

Suggested Citation

  • Joaquin Coleff & Daniel Garcia, 2013. "Information Provision in Procurement Auctions," Borradores de Investigación 011006, Universidad del Rosario.
  • Handle: RePEc:col:000091:011006
    as

    Download full text from publisher

    File URL: http://repository.urosario.edu.co/bitstream/handle/10336/10997/11006.pdf?sequence=1&isAllowed=y
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Tong Li & Xiaoyong Zheng, 2009. "Entry and Competition Effects in First-Price Auctions: Theory and Evidence from Procurement Auctions," Review of Economic Studies, Oxford University Press, vol. 76(4), pages 1397-1429.
    2. Juan-José Ganuza, 2003. "Ignorance Promotes Competition: an Auction Model with Endogenous Private Valuations," Working Papers 107, Barcelona Graduate School of Economics.
    3. Justin Jia & Ronald M. Harstad & Michael H. Rothkopf, 2010. "Information Variability Impacts in Auctions," Decision Analysis, INFORMS, vol. 7(1), pages 137-142, March.
    4. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
    5. Taylor, Curtis R, 1995. "Digging for Golden Carrots: An Analysis of Research Tournaments," American Economic Review, American Economic Association, vol. 85(4), pages 872-890, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:col:000091:011006. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Facultad de Economía). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.