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Competition for Procurement Shares

  • Alcalde, José
  • Dahm, Matthias

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 par- ticipate in the procurement procedure, as equilibrium payoffs are strictly positive. (ii) The mechanism allows to vary the extent to which affirma- tive action objectives, like promoting local industries, are pursued. (iii) Surprisingly, even accomplishing affirmative action goals, procurement ex- penditures might be lower than under a classical auction format. Keywords: Procurement Auction, Affirmative Action. JEL: C72, D44, H57

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Paper provided by Universitat Rovira i Virgili, Department of Economics in its series Working Papers with number 2072/169682.

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Date of creation: 2011
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Handle: RePEc:urv:wpaper:2072/169682
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