Information Provision in Procurement Auctions

Daniel Garcia and Joaquím Coleff ()
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Joaquím Coleff: https://econ.univie.ac.at

Vienna Economics Papers from University of Vienna, Department of Economics

Abstract: We analyze the optimal provision of information in a procurement auction with horizontally differentiated 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 find it optimal to send public information to all sellers. On the other hand, she may profit 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.

JEL-codes: D44 D82 H57 (search for similar items in EconPapers)
Date: 2013-09
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https://papersecon.univie.ac.at/RePEc/vie/viennp/vie1306.pdf (application/pdf)

Related works:
Journal Article: Information Provision in Procurement Auctions (2017)
Working Paper: Information Provision in Procurement Auctions (2013)
Working Paper: Information Provision in Procurement Auctions (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:vie:viennp:vie1306

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