Auctions for Split‐Award Contracts

Martin K. Perry and József Sákovics

Journal of Industrial Economics, 2003, vol. 51, issue 2, 215-242

Abstract: The buyer of a homogeneous input divides his input requirements into two contracts that are awarded to different suppliers. He uses a sequential second‐price auction to award a primary and a secondary contract. With a fixed number of suppliers the buyer pays a higher expected price than with a sole‐source auction. The premium paid to the winner of the secondary contract must also be paid to the winner of the primary contract as an opportunity cost. When entry is endogenous, we identify the conditions under which a secondary contract can increase the number of suppliers and lower the expected price.

Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
https://doi.org/10.1111/1467-6451.00199

Related works:
Working Paper: Auctions for Split-Award Contracts (2002)
Working Paper: Auctions for Split-Award Contracts (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jindec:v:51:y:2003:i:2:p:215-242

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0022-1821

Access Statistics for this article

Journal of Industrial Economics is currently edited by Pierre Regibeau, Yeon-Koo Che, Kenneth Corts, Thomas Hubbard, Patrick Legros and Frank Verboven

More articles in Journal of Industrial Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().