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Ex-ante Investment and Stochastic Quality in Procurement Auctions

Title
Ex-ante Investment and Stochastic Quality in Procurement Auctions
Author
고영우
Keywords
Procurement auction; Ex-ante investment; Stochastic quality
Issue Date
2017-02
Publisher
서강대학교 지암남덕우경제연구원
Citation
시장경제연구, v. 46, no. 1, page. 73-90
Abstract
This study examines procurement auction with ex-ante identical firms. The buyer wishes to procure an innovation, the quality of which stochastically depends on firms’ effort level. We analyze firms’ optimal investment and bidding strategies and show that the buyer’s payoff is non-monotone for the number of firms in the auction. We show that the buyer benefits with many firms when the probabilities of high quality from different investment levels are close to each other or the cost of high effort is sufficiently large or small. We also identify conditions under which the buyer benefits with less number of firms.
URI
http://kiss.kstudy.com/thesis/thesis-view.asp?key=3500872https://repository.hanyang.ac.kr/handle/20.500.11754/112636
ISSN
2092-6332
Appears in Collections:
COLLEGE OF ECONOMICS AND FINANCE[S](경제금융대학) > ECONOMICS & FINANCE(경제금융학부) > Articles
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