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Contracting with Capacity Constrained Suppliers

  • Parlane, S.

In this paper I characterize the optimal and efficient mechanisms to allocate simultaneously 2 tasks to 2 capacity constrained suppliers. I show that efficiency can always be achieved using some modified second price auctions. The efficient mechanism is optimal in the case of monotone incentives. When countervailing incentives arise, production is distorted from efficiency over a nondegenerate interval of types so as to extract the full surplus over that interval.

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Paper provided by College Dublin, Department of Political Economy- in its series Papers with number 98/4.

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Length: 21 pages
Date of creation: 1998
Date of revision:
Handle: RePEc:fth:dublec:98/4
Contact details of provider: Postal: Ireland; University College Dublin, Department of Political Economy, Centre for Economic Research, Belfield, Dublin 4
Phone: +353-1-7067777
Fax: +353-1-283 0068
Web page: http://www.ucd.ie/economics/

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