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Competition for Procurement Shares

  • ALCALDE, JOSÉ

    ()

    (Universidad de Alicante, Departamento de Métodos Cuantitativos y Teoría Económica)

  • MATTHIAS, DAHM

    ()

    (Universitat Rovira i Virgili)

We propose a new procurement procedure which allocates shares of the total amount to be procured depending on the bids of suppliers. Among the properties of the mechanism are: (i) Bidders have an incentive to participate in the procurement procedure, as equilibrium payo s are strictly positive. (ii) The mechanism allows to vary the extent to which armative action objectives, like promoting local industries, are pursued. (iii) Surprisingly, even accomplishing armative action goals, procurement expenditures might be lower than under a classical auction format.

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Paper provided by Universidad de Alicante, Departamento de Métodos Cuantitativos y Teoría Económica in its series QM&ET Working Papers with number 11-3.

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Length: 40 pages
Date of creation: 16 Dec 2011
Date of revision:
Handle: RePEc:ris:qmetal:2011_003
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