Should I Share or Should I Not? On the Sharing of Information on Past Performance in Procurement

Many real-world public-sector purchases involve a combination of verifiable and non-verifiable dimensions of quality, leading to a classical incomplete-contracting problem. This paper analyses how public buyers may use debarment lists — in essence, blacklists of under-performing contractors — to incentivize quality provision in repeated procurement tenders. A key question is whether debarment lists should be shared among multiple agencies or maintained separately. Sharing multiplies the punishment for bad performance (an under-performing firm loses access to all agencies, not just one), which might strongly deter shirking. However, this paper shows that sharing debarment lists backfires when mistakes may occur in judging quality ex-post: if one agency erroneously penalizes a cooperative contractor, that error propagates to every agency, potentially discouraging contractors from exerting high quality in the first place. By modelling repeated interactions and allowing for observational errors, we show the implicit costs stemming from a shared debarment list, and draw policy lessons for designing blacklists in public procurement.