Affirmative Action Subcontracting Regulations in Dynamic Procurement Auctions

Benjamin Rosa

MPRA Paper from University Library of Munich, Germany

Abstract: I study affirmative action subcontracting regulations in a model where governments use auctions to repeatedly procure goods and services at the lowest possible price. Through using disadvantaged subcontractors, prime contractors build relationships over time, resulting in lower subcontracting costs in future periods. I find that regulation in the form of a minimum subcontracting requirement expands bidder asymmetries, favoring prime contractors with stronger relationships over those with weaker ones. Simulations show that the manner in which relationships evolve determines not only the utilization of disadvantaged subcontractors but also the procurement costs attained under affirmative action.

Keywords: Dynamic auctions; affirmative action; procurement (search for similar items in EconPapers)
JEL-codes: C6 C73 D44 (search for similar items in EconPapers)
Date: 2019-04-01
New Economics Papers: this item is included in nep-des and nep-reg
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https://mpra.ub.uni-muenchen.de/93065/1/MPRA_paper_93065.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/98595/1/MPRA_paper_98595.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/100983/1/MPRA_paper_100983.pdf revised version (application/pdf)

Related works:
Journal Article: Affirmative action subcontracting regulations in dynamic procurement auctions (2020)
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