Favoritism, anonimity and renegotiation in procurement

This paper shed2 light on a mechanism for implementing favoritism even in a symmetric framework. We analyze a procurement setting in which the optimal design of the project is unknown. The sponsor has to invest in specifying the project. The larger the investment, the higher the probability that the...

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Autores principales: Weinschelbaum, Federico, Arozamena, Leandro, Ganuza, Juan Jose
Formato: Objeto de conferencia
Lenguaje:Inglés
Publicado: 2018
Materias:
Ciencias Económicas
Auctions
Favoritism
Auction Design
Renegotiation
Acceso en línea:http://sedici.unlp.edu.ar/handle/10915/169186
Aporte de:
SEDICI (UNLP) de Universidad Nacional de La Plata
id I19-R120-10915-169186
record_format dspace
spelling I19-R120-10915-1691862024-09-02T20:01:59Z http://sedici.unlp.edu.ar/handle/10915/169186 Favoritism, anonimity and renegotiation in procurement Weinschelbaum, Federico Arozamena, Leandro Ganuza, Juan Jose 2018-11 2018 2024-08-28T13:58:11Z en Ciencias Económicas Auctions Favoritism Auction Design Renegotiation This paper shed2 light on a mechanism for implementing favoritism even in a symmetric framework. We analyze a procurement setting in which the optimal design of the project is unknown. The sponsor has to invest in specifying the project. The larger the investment, the higher the probability that the initial design is optimal. Otherwise, a bargaining process between the winning firm and the sponsor takes place. The bargaining benefits of the winning firm are larger when this is the favored firm. Given this comparative advantage, the favored firm bids more aggressively and then, it wins more often than standard firms. We show that the sponsor invests less in specifying the initial design when favoritism is stronger. Underinvestment in design specification is a tool for giving a comparative advantage to the favored firm. Facultad de Ciencias Económicas Objeto de conferencia Objeto de conferencia http://creativecommons.org/licenses/by-nc-sa/4.0/ Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) application/pdf
institution Universidad Nacional de La Plata
institution_str I-19
repository_str R-120
collection SEDICI (UNLP)
language Inglés
topic Ciencias Económicas
Auctions
Favoritism
Auction Design
Renegotiation
spellingShingle Ciencias Económicas
Auctions
Favoritism
Auction Design
Renegotiation
Weinschelbaum, Federico
Arozamena, Leandro
Ganuza, Juan Jose
Favoritism, anonimity and renegotiation in procurement
topic_facet Ciencias Económicas
Auctions
Favoritism
Auction Design
Renegotiation
description This paper shed2 light on a mechanism for implementing favoritism even in a symmetric framework. We analyze a procurement setting in which the optimal design of the project is unknown. The sponsor has to invest in specifying the project. The larger the investment, the higher the probability that the initial design is optimal. Otherwise, a bargaining process between the winning firm and the sponsor takes place. The bargaining benefits of the winning firm are larger when this is the favored firm. Given this comparative advantage, the favored firm bids more aggressively and then, it wins more often than standard firms. We show that the sponsor invests less in specifying the initial design when favoritism is stronger. Underinvestment in design specification is a tool for giving a comparative advantage to the favored firm.
format Objeto de conferencia
Objeto de conferencia
author Weinschelbaum, Federico
Arozamena, Leandro
Ganuza, Juan Jose
author_facet Weinschelbaum, Federico
Arozamena, Leandro
Ganuza, Juan Jose
author_sort Weinschelbaum, Federico
title Favoritism, anonimity and renegotiation in procurement
title_short Favoritism, anonimity and renegotiation in procurement
title_full Favoritism, anonimity and renegotiation in procurement
title_fullStr Favoritism, anonimity and renegotiation in procurement
title_full_unstemmed Favoritism, anonimity and renegotiation in procurement
title_sort favoritism, anonimity and renegotiation in procurement
publishDate 2018
url http://sedici.unlp.edu.ar/handle/10915/169186
work_keys_str_mv AT weinschelbaumfederico favoritismanonimityandrenegotiationinprocurement
AT arozamenaleandro favoritismanonimityandrenegotiationinprocurement
AT ganuzajuanjose favoritismanonimityandrenegotiationinprocurement
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