Procurement Auctions with Entry of Bidders

E. Kjerstad and Steinar Vagstad

Norway; Department of Economics, University of Bergen from Department of Economics, University of Bergen

Abstract: In procurement auctions with a fixed number of bidders there is a tradeoff between cost efficiency and rent extraction. An optimal mechanism, therefore, entails distortions of effort. If potential suppliers must sink an entry investment before they can participate in the auction, then decreasing the firms' rent may imply reduced entry.

Keywords: AUCTIONS; CONTRACTS; INCENTIVES (search for similar items in EconPapers)
JEL-codes: D44 D82 L51 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (16)

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Journal Article: Procurement auctions with entry of bidders (2000)
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