Information Provision in Procurement Auctions

Joaquin Coleff and Daniel Garcia

No 11006, Borradores de Investigación from Universidad del Rosario

Abstract: Abstract: We analyze the optimal provision of information in a procurement auction with horizontally diff erentiated goods. The buyer has private information about her preferred location on the product space and has access to a costless communication device. A seller who pays the entry cost may submit a bid comprising a location and a minimum price. We characterize the optimal information structure and show that the buyer prefers to attract only two bids. Further, additional sellers are inefficient since they reduce total and consumer surplus, gross of entry costs. We show that the buyer will not nd it optimal to send public information to all sellers. On the other hand, she may pro fit from setting a minimum price and that a severe hold-up problem arises if she lacks commitment to set up the rules of the auction ex-ante.

Pages: 23
Date: 2013-09-02
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Related works:
Journal Article: Information Provision in Procurement Auctions (2017)
Working Paper: Information Provision in Procurement Auctions (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000091:011006

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