Auctions for Public Construction with Corner-cutting
This paper reports the theoretical and experimental results of auctions for public construction in which firms cut corners. We show that the winning bids and the winner's quality choices of the constructed buildings are both zero in equilibria if there are at least two firms whose initial cash balances are zero, and it is a common knowledge. The experimental results are close to the theoretical results and indicate that firms with zero-initial cash balance win and that the winning bids and the winner's quality choices of the constructed buildings are considerably low.
|Date of creation:||May 2009|
|Date of revision:||Jul 2010|
|Contact details of provider:|| Postal: 6-1 Mihogaoka, Ibaraki, Osaka 567-0047|
Web page: http://www.iser.osaka-u.ac.jp/index-e.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cox, James C. & Isaac, R. Mark, 2008. "Procurement Contracting," Handbook of Experimental Economics Results, Elsevier.
- Juan José Ganuza, 2003. "Competition and cost overruns in procurement," Economics Working Papers 772, Department of Economics and Business, Universitat Pompeu Fabra.
- Aleix Calveras & Juan J. Ganuza & Esther Hauk, 2001.
"Wild bids. Gambling for resurrection in procurement contracts,"
Economics Working Papers
553, Department of Economics and Business, Universitat Pompeu Fabra, revised Apr 2001.
- Aleix Calveras & Juan-Jose Ganuza & Esther Hauk, 2004. "Wild Bids. Gambling for Resurrection in Procurement Contracts," Journal of Regulatory Economics, Springer, vol. 26(1), pages 41-68, 07.
- Thomas VON UNGERN-STERNBERG, 1991.
"Quality Incentives in Auctions for Construction Contracts,"
Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP)
9101, Université de Lausanne, Faculté des HEC, DEEP.
- von Ungern-Sternberg, Thomas, 1994. "Quality incentives in auctions for construction contracts," International Journal of Industrial Organization, Elsevier, vol. 12(1), pages 89-104, March.
- Yeon-Koo Che, 1993.
"Design Competition through Multidimensional Auctions,"
RAND Journal of Economics,
The RAND Corporation, vol. 24(4), pages 668-680, Winter.
- Che, Y.K., 1991. "Design Competition through Multidimensional Auctions," Working papers 9123, Wisconsin Madison - Social Systems.
- Alejandro M. Manelli & Daniel R. Vincent, 1992.
"Optimal Procurement Mechanisms,"
999, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Dufwenberg, Martin & Gneezy, Uri, 2000.
"Price competition and market concentration: an experimental study,"
International Journal of Industrial Organization,
Elsevier, vol. 18(1), pages 7-22, January.
- Dufwenberg, Martin & Gneezy, Uri, 1998. "Price Competition and Market Concentration: An Experimental Study," Working Paper Series 1998:8, Uppsala University, Department of Economics.
- Dufwenberg, M. & Gneezy, U., 1998. "Price Competition and Market COncentration: An Experimental Study," Papers 1998-08, Uppsala - Working Paper Series.
- Dufwenberg, Martin & Gneezy, Uri, 1999. "Price Competition and Market Concentration: An experimental Study," Research Papers in Economics 1999:4, Stockholm University, Department of Economics.
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
- Dufwenberg, Martin & Gneezy, Uri, 2002. "Information disclosure in auctions: an experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 48(4), pages 431-444, August.
- Sinclair-Desgagne, Bernard, 1990. "On the regulation of procurement bids," Economics Letters, Elsevier, vol. 33(3), pages 229-232, July.
- Dasgupta, Sudipto & Spulber, Daniel F., 1989. "Managing procurement auctions," Information Economics and Policy, Elsevier, vol. 4(1), pages 5-29.
When requesting a correction, please mention this item's handle: RePEc:dpr:wpaper:0740r. 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: (Fumiko Matsumoto)
If references are entirely missing, you can add them using this form.