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All-receive procurement auctions

Author

Listed:
  • Rey, Patrick
  • Loertscher, Simon
  • Marx, Leslie

Abstract

We develop the procurement analogue to an all-pay auction for an independent private values model with identical distributions. In this all-receive procurement auction (ARPA), suppliers simultaneously submit bids. Suppliers with bids below (above) the reserve are paid their bids (are paid and produce nothing). The supplier with the largest bid below the reserve produces the good. With appropriately chosen reserves, which decrease in the number of suppliers, the ARPA is efficient and, given increasing virtual costs, implements the optimal procurement. Appropriately adjusted, ARPAs implement the optimal procurement in general. ARPAs can render supply chains resilient to nonanticipated liquidity shocks.

Suggested Citation

  • Rey, Patrick & Loertscher, Simon & Marx, Leslie, 2025. "All-receive procurement auctions," TSE Working Papers 25-1637, Toulouse School of Economics (TSE).
    • Handle: RePEc:tse:wpaper:130525
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    More about this item

    Keywords

    Resilience; Liquidity shocks; All-pay auctions; Multiple-receive procurement 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
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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