Asymmetric Cost Pass‐Through in Multi‐Unit Procurement Auctions: An Experimental Approach

Erica Myers, Bostian Aj and Harrison Fell

Journal of Industrial Economics, 2021, vol. 69, issue 1, 109-130

Abstract: We explore input cost pass‐through in multi‐unit procurement auctions. Whether cost shocks are private versus common across firms has important implications for discriminatory, but not uniform price auctions. We provide evidence of asymmetric pass‐through of private cost shocks in discriminatory auctions. Unlike uniform price auctions, revenue‐maximizing bidders in discriminatory auctions ‘pad’ bids close to the expected clearing price for units with costs below that price, but they do not bid below cost on higher cost units. Therefore, if costs are higher than expected, the clearing price rises and if costs are lower than expected, the clearing price remains high.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/joie.12254

Related works:
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:69:y:2021:i:1:p:109-130

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 ().