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Discrimination in Dynamic Procurement Design with Learning-by-doing

Author

Listed:
  • Klenio Barbosa

    (Sao Paulo School of Economics, FGV)

  • Pierre Boyer

    (CREST, Ecole Polytechnique, Université Paris Saclay)

Abstract

We study the long-run impact of procurement discrimination on market structure and future competition in industries where learning-by-doing makes incumbent firms more efficient over time. We consider a sequential procurement design problem in which local and global firms compete for public good provision. Both firms benefit from learningby-doing if they provide the public good in the previous period, but global firms only may be able to transfer learning-by-doing from different markets. We show when the optimal procurement has to be biased in favor of the local firm even when all firms are symmetric with respect to their initial cost distribution.

Suggested Citation

  • Klenio Barbosa & Pierre Boyer, 2016. "Discrimination in Dynamic Procurement Design with Learning-by-doing," Working Papers 2016-37, Center for Research in Economics and Statistics.
    • Handle: RePEc:crs:wpaper:2016-37
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    Cited by:

    1. Elisabetta Iossa & Patrick Rey & Michael Waterson, 2022. "Organising Competition for the Market," Journal of the European Economic Association, European Economic Association, vol. 20(2), pages 822-868.
    2. Hanspach, Philip, 2023. "The home bias in procurement. Cross-border procurement of medical supplies during the Covid-19 pandemic," International Journal of Industrial Organization, Elsevier, vol. 89(C).

    More about this item

    Keywords

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    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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