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Protection in government procurement auctions

Matthew Cole (), Ronald Davies () and Todd Kaplan ()

Journal of International Economics, 2017, vol. 106, issue C, 134-142

Abstract: Discrimination against foreign bidders in procurement auctions has typically been achieved by price preferences. We demonstrate that in the bidding game, each level of protection via a price preference can be achieved by an equivalent tariff. When government welfare depends only on net expenditures, this equivalence carries over to the government's decision. As such, this equivalence provides a justification that agreements to eliminate price preferences to be taken in tandem with agreements to lower tariffs; e.g., the Government Procurement Agreement (GPA) in the broader context of the WTO.

Keywords: Government procurement; Tariffs; Price preference (search for similar items in EconPapers)
JEL-codes: F12 F13 H57 (search for similar items in EconPapers)
Date: 2017
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Working Paper: Protection in Government Procurement Auctions (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:106:y:2017:i:c:p:134-142

DOI: 10.1016/j.jinteco.2017.03.003

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