Information design in sequential procurement

Nicolas Fugger, Vitali Gretschko and Martin Pollrich

Games and Economic Behavior, 2022, vol. 135, issue C, 79-85

Abstract: We analyze the problem of a buyer who chooses a supplier for a two-period production project. The buyer lacks the commitment not to renegotiate the contractual terms in the second period. The prospect of renegotiation makes suppliers cautious about the information revealed in period one. We derive the revenue-maximizing mechanism and highlight the role of information design for its implementation. We show that the buyer can achieve the full commitment surplus with the appropriate information design even without commitment.

Keywords: Sequential screening; Information design; Auctions; Procurement; Commitment (search for similar items in EconPapers)
JEL-codes: D44 D47 D82 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:135:y:2022:i:c:p:79-85

DOI: 10.1016/j.geb.2022.05.013

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