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Affirmative Action Through Endogenous Set-Asides

Jose Alcalde () and Matthias Dahm ()

No 20-1, QM&ET Working Papers from University of Alicante, D. Quantitative Methods and Economic Theory

Abstract: We study the effects of affirmative action through endogenous set-asides. We propose a share auction for dual sourcing in which more intensive affirmative action strengthens the favoured provider. This induces potentially more competitive procurement overall. Our main result considers a complete information setting and provides a condition under which affirmative action not only guarantees very substantial minority representation, but also reduces the buyer's provision cost compared to a first-price auction. We also consider extensions of the benchmark model, including to a setting in which providers have private information about their costs.

Keywords: Affirmative Action; Bidding Credits; Bidding Preferences; Set-Asides (search for similar items in EconPapers)
JEL-codes: D44 D47 H57 J15 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2020-02-11
New Economics Papers: this item is included in nep-mic
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