Per-unit bidding rules and buyer under-performance in natural resource sales

W. Walls and F. Rusco

No 2014-63, Working Papers from Department of Economics, University of Calgary

Abstract: In this article, we examine the role of per-unit bidding rules on firm-level contractual performance. In particular, we test the hypothesis that buyers will act on incentives to under-perform when bids are accepted in per-unit form. The empirical application uses data from per-unit auction sales of US Forest Service timber. The statistical analysis indicates that buyers systematically undercut when per-unit bids exceed the value of individual units of timber.

Keywords: per-unit bidding; moral hazard; natural resource auctions (search for similar items in EconPapers)
Date: 2014-09-23
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Journal Article: Per-unit bidding rules and buyer under-performance in natural resource sales (2007)
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