IDEAS home Printed from https://ideas.repec.org/p/nwu/cmsems/1078.html
   My bibliography  Save this paper

Economic Incentives and the Defense Procurement Process

Author

Listed:
  • William P. Rogerson

Abstract

This paper descrives some of the insights that the economic theory of incentives can contribute to defense procurment policy analysis. It descrives the underlying incentive problems that shape the defense procurement problem, the nature of current institutions and how they affect actors' behavior, and possible directions for improving the procurement process suggested by viewing it as a solution to a complex set of incentive problems. Incentive problems between government and defense firms and incentive problems within government are both considered.

Suggested Citation

  • William P. Rogerson, 1993. "Economic Incentives and the Defense Procurement Process," Discussion Papers 1078, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    • Handle: RePEc:nwu:cmsems:1078
    as

    Download full text from publisher

    File URL: http://www.kellogg.northwestern.edu/research/math/papers/1078.pdf
    File Function: main text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kirk Monteverde & David J. Teece, 1982. "Supplier Switching Costs and Vertical Integration in the Automobile Industry," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 206-213, Spring.
    2. Steve Kelman, 1990. "Procurement and Public Management," Books, American Enterprise Institute, number 53122, September.
    3. Frank R. Lichtenberg, 1988. "Government Subsidies to Private Military R&D Investment: DOD's IR&D Policy," NBER Working Papers 2745, National Bureau of Economic Research, Inc.
    4. Keith J. Crocker & Kenneth J. Reynolds, 1993. "The Efficiency of Incomplete Contracts: An Empirical Analysis of Air Force Engine Procurement," RAND Journal of Economics, The RAND Corporation, vol. 24(1), pages 126-146, Spring.
    5. Rogerson, William P, 1990. "Quality vs. Quantity in Military Procurement," American Economic Review, American Economic Association, vol. 80(1), pages 83-92, March.
    6. Michael H. Riordan & David E.M. Sappington, 1989. "Second Sourcing," RAND Journal of Economics, The RAND Corporation, vol. 20(1), pages 41-58, Spring.
    7. Anthony G. Bower & Kent Osband, 1991. "When More is Less: Defense Profit Policy in a Competitive Environment," RAND Journal of Economics, The RAND Corporation, vol. 22(1), pages 107-119, Spring.
    8. Kovacic, William E, 1991. "Commitment in Regulation: Defense Contracting and Extensions to Price Caps," Journal of Regulatory Economics, Springer, vol. 3(3), pages 219-240, September.
    9. Rogerson, William P, 1989. "Profit Regulation of Defense Contractors and Prizes for Innovation," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1284-1305, December.
    10. Tirole, Jean, 1986. "Procurement and Renegotiation," Journal of Political Economy, University of Chicago Press, vol. 94(2), pages 235-259, April.
    11. Victor P. Goldberg, 1976. "Regulation and Administered Contracts," Bell Journal of Economics, The RAND Corporation, vol. 7(2), pages 426-448, Autumn.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michael Oden, 2000. "Federal Defense Industrial Policy, Firm Strategy, and Regional Conversion Initiatives in Four American Aerospace Regions," International Regional Science Review, , vol. 23(1), pages 25-47, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. William P. Rogerson, 1994. "Economic Incentives and the Defense Procurement Process," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 65-90, Fall.
    2. Timothy Bresnahan & Jonathan Levin, 2012. "Vertical Integration and Market Structure [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    3. Susan J. Guthrie & Hines, James R. Jr., 2011. "U.S. DEFENSE CONTRACTS DURING the TAX EXPENDITURE BATTLES of the 1980s," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(2), pages 731-751, June.
    4. Yossef Spiegel, 1996. "The Role of Debt in Procurement Contracts," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 5(3), pages 379-407, September.
    5. Surajeet Chakravarty & W. Bentley MacLeod, 2006. "Construction Contracts (or “How to Get the Right Building at the Right Price?”)," CESifo Working Paper Series 1714, CESifo.
    6. Kosnik, Lea & Lange, Ian, 2011. "Contract renegotiation and rent re-distribution: Who gets raked over the coals?," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 155-165, September.
    7. William P. Rogerson, 1988. "Profit Regulation of Defense Contractors and Prizes for Innovation : Theory and Evidence," Discussion Papers 759, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    8. Artz, Kendall W. & Brush, Thomas H., 2000. "Asset specificity, uncertainty and relational norms: an examination of coordination costs in collaborative strategic alliances," Journal of Economic Behavior & Organization, Elsevier, vol. 41(4), pages 337-362, April.
    9. Kim, In-Gyu, 1998. "A model of selective tendering: Does bidding competition deter opportunism by contractors?," The Quarterly Review of Economics and Finance, Elsevier, vol. 38(4), pages 907-925.
    10. Rodrigo Carril & Andres Gonzalez-Lira & Michael S. Walker, 2022. "Competition under Incomplete Contracts and the Design of Procurement Policies," Working Papers 1327, Barcelona School of Economics.
    11. Garg, Shresth & Ghosh, Pulak & Tan, Brandon Joel, 2023. "Within firm supply chains: Evidence from India," Journal of International Economics, Elsevier, vol. 144(C).
    12. Yongmin Chen & Ron Smith, 2001. "Equilibrium Cost Overruns," Annals of Economics and Finance, Society for AEF, vol. 2(2), pages 401-414, November.
    13. Dalen, D.M. & von der Fehr, N.-H.M. & Moen, E.R., 1998. "Regulation and Wage Bargaining," Memorandum 13/1998, Oslo University, Department of Economics.
    14. Rodrigo Carril, 2021. "Rules Versus Discretion in Public Procurement," Working Papers 1232, Barcelona School of Economics.
    15. Jean-Jacques Laffont & Jean Tirole, 1988. "Repeated Auctions of Incentive Contracts, Investment, and Bidding Parity with an Application to Takeovers," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 516-537, Winter.
    16. Mikko Ketokivi & Joseph T. Mahoney, 2020. "Transaction Cost Economics As a Theory of Supply Chain Efficiency," Production and Operations Management, Production and Operations Management Society, vol. 29(4), pages 1011-1031, April.
    17. Eshien Chong & Freddy Huet & Stéphane Saussier, 2006. "Auctions, Ex Post Competition And Prices: The Efficiency Of Public‐Private Partnerships," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 77(4), pages 521-554, December.
    18. Fabian Herweg & Marco A. Schwarz, 2016. "Optimal Cost Overruns: Procurement Auctions and Renegotiation," CESifo Working Paper Series 5838, CESifo.
    19. Pierre-André Chiappori & Bernard Salanié, 2002. "Testing Contract Theory : A Survey of Some Recent Work," Working Papers 2002-11, Center for Research in Economics and Statistics.
    20. Patrick Bajari & Stephanie Houghton & Steve Tadelis, 2006. "Bidding for Incomplete Contracts: An Empirical Analysis," NBER Working Papers 12051, National Bureau of Economic Research, Inc.

    More about this item

    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:nwu:cmsems:1078. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Fran Walker (email available below). General contact details of provider: https://edirc.repec.org/data/cmnwuus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.