Imitation Perfection - A Simple Rule to Prevent Discrimination in Procurement

Nicolas Fugger, Vitali Gretschko, Helene Mass () and Achim Wambach

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: Procurement regulation aimed at curbing discrimination requires equal treatment of sellers. However, Deb and Pai show that such regulation imposes virtually no restrictions on the ability to discriminate. We propose a simple rule - imitation perfection - that restricts discrimination significantly. It ensures that in every equilibrium bidders with the same valuation distribution and the same valuation earn the same expected utility. If all bidders are homogeneous, revenue and social surplus optimal auctions consistent with imitation perfection exist. For heterogeneous bidders, however, it is incompatible with revenue and social surplus optimization. Thus, a trade-off between non-discrimination and optimality exists.

Keywords: Discrimination; symmetric auctions; procurement regulation (search for similar items in EconPapers)
JEL-codes: D44 D73 D82 L13 (search for similar items in EconPapers)
Pages: 64
Date: 2020-11
New Economics Papers: this item is included in nep-gth, nep-mic and nep-upt
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Journal Article: Imitation Perfection—A Simple Rule to Prevent Discrimination in Procurement (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2020_225v2

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