Non-Committed Procurement under Intricate Uncertainty

Seungjin Han

Department of Economics Working Papers from McMaster University

Abstract: This paper studies asymmetric first-price menu auctions in the procurement environment where the buyer does not commit to a decision rule and asymmetric sellers have interdependent costs and statistically affiliated signals. Sellers compete in bidding a menu of contracts, where a contract specifies a vector of characteristics and a payment required from the buyer for delivering these characteristics. The buyer does not commit ex-ante to a decision rule but rather upon observing all the menus offered by sellers chooses the best contract. This paper establishes the existence of a continuum of separating monotone equilibria in this game bounded above by the jointly ex-post efficient outcome and below by the jointly interim efficient outcome. It shows that the jointly ex-post efficient equilibrium outcome is the only ex-post renegotiation proof outcome and it is also ex-ante robust to all continuation equilibria.

Keywords: first-price menu auctions; procurement; interdependent values; monotone equilibria; joint ex-post efficiency; ex-post renegotiation-proofness; ex-ante robustness (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2010-03, Revised 2013-03
New Economics Papers: this item is included in nep-cta
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Persistent link: https://EconPapers.repec.org/RePEc:mcm:deptwp:2010-03

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