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On Procurement Auctions Of Complementary Goods

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  • Veronika Grimm

    (Universidad de Alicante)

Abstract

We compare sequential and bundle auctions in a framework of successive procurement situations, where current success positively affects future market opportunities and competition varies across projects. We find that - if allocation of the projects has to be ensured - bundle auctions with subsequent resale opportunities yield a lower and less risky overall price, whereas sequential procurement leads to the efficient outcome.

Suggested Citation

  • Veronika Grimm, 2004. "On Procurement Auctions Of Complementary Goods," Working Papers. Serie AD 2004-02, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasad:2004-02
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    File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2004-02.pdf
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    References listed on IDEAS

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    1. Flavio Menezes & Paulo Monteiro, 2003. "Synergies and price trends in sequential auctions," Review of Economic Design, Springer;Society for Economic Design, vol. 8(1), pages 85-98, August.
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    8. Palfrey, Thomas R, 1983. "Bundling Decisions by a Multiproduct Monopolist with Incomplete Information," Econometrica, Econometric Society, vol. 51(2), pages 463-483, March.
    9. Christopher Avery & Terrence Hendershott, 2000. "Bundling and Optimal Auctions of Multiple Products," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 483-497.
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    Cited by:

    1. Cuihong Li & Laurens G. Debo, 2009. "Strategic dynamic sourcing from competing suppliers with transferable capacity investment," Naval Research Logistics (NRL), John Wiley & Sons, vol. 56(6), pages 540-562, September.
    2. Veronika Grimm, 2007. "Sequential versus Bundle Auctions for Recurring Procurement," Journal of Economics, Springer, vol. 90(1), pages 1-27, January.

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    More about this item

    Keywords

    Sequential auctions; bundling; stochastic scale effects; procurement.;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing

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