Communication of preferences in contests for contracts

Todd Kaplan

Economic Theory, 2012, vol. 51, issue 2, 487-503

Abstract: This paper models a contest where several sellers compete for a contract with a single buyer. There are several styles of possible designs with a subset of them preferred by the buyer. We examine what happens when the buyer communicates information about his preferences. If the sellers are unable to change their style, then there is no effect on the welfare of the sellers. If the sellers are able to make adjustments, extra information may either boost or damage the sellers’ profits. While the chance that there will be a proposal of a style preferred by the buyer cannot decrease, the buyer’s surplus may increase or decrease. Copyright Springer-Verlag 2012

Keywords: Contests; Procurement; Communication; D44; H57 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (14)

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Working Paper: Communication of Preferences in Contests for Contracts (2009)
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DOI: 10.1007/s00199-010-0525-2

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