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Information revelation in procurement auctions: an equivalence result

Author

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  • Domenico Colucci
  • Nicola Doni
  • Vincenzo Valori

Abstract

Procurement auctions often involve quality considerations as a determinant of the final outcome. When the procurer has private information about qualities, various information policies may be used to affect the expected outcome. For auctions with two cost heterogeneous suppliers, this work defines a notion of duality between pairs of policies, and shows that dual policies are revenue equivalent.

Suggested Citation

  • Domenico Colucci & Nicola Doni & Vincenzo Valori, 2019. "Information revelation in procurement auctions: an equivalence result," Discussion Papers 2019/248, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    • Handle: RePEc:pie:dsedps:2019/248
    Note: ISSN 2039-1854
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    File URL: https://www.ec.unipi.it/documents/Ricerca/papers/2019-248.pdf
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    References listed on IDEAS

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    1. Dimitris Kostamis & Damian R. Beil & Izak Duenyas, 2009. "Total-Cost Procurement Auctions: Impact of Suppliers' Cost Adjustments on Auction Format Choice," Management Science, INFORMS, vol. 55(12), pages 1985-1999, December.
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    4. Hubbard, Timothy P. & Paarsch, Harry J., 2009. "Investigating bid preferences at low-price, sealed-bid auctions with endogenous participation," International Journal of Industrial Organization, Elsevier, vol. 27(1), pages 1-14, January.
    5. Esther Gal-Or & Mordechai Gal-Or & Anthony Dukes, 2007. "Optimal information revelation in procurement schemes," RAND Journal of Economics, RAND Corporation, vol. 38(2), pages 400-418, June.
    6. McAfee, R. Preston & McMillan, John, 1989. "Government procurement and international trade," Journal of International Economics, Elsevier, vol. 26(3-4), pages 291-308, May.
    7. Colucci, Domenico & Doni, Nicola & Valori, Vincenzo, 2012. "Preferential treatment in procurement auctions through information revelation," Economics Letters, Elsevier, vol. 117(3), pages 883-886.
    8. Domenico Colucci & Nicola Doni & Vincenzo Valori, 2015. "Information policies in procurement auctions with heterogeneous suppliers," Journal of Economics, Springer, vol. 114(3), pages 211-238, April.
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    More about this item

    Keywords

    procurement; information revelation; discriminatory policy; asymmetric auctions;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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