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 TEL  Vol.4 No.8 , October 2014
Common-Value Procurement Auctions with Renegotiation
Abstract: This note contains the equilibrium bid functions for two types of common-value procurement auctions: 1) a procurement auction in which bids represent an enforceable contract; 2) a procurement auction in which, upon learning the true cost of supplying the good, the winning bidder can renegotiate the contract with the buyer, and each bidder must submit a bond with their bid, which is returned at the end of the auction unless they are the low bidder and renegotiate the contract.
Cite this paper: Baltaduonis, R. and Rentschler, L. (2014) Common-Value Procurement Auctions with Renegotiation. Theoretical Economics Letters, 4, 619-622. doi: 10.4236/tel.2014.48078.
References

[1]   Milgrom, P.R. and Weber, R.J. (1982) A Theory of Auctions and Competitive Bidding. Econometrica, 50, 1089-1122. http://dx.doi.org/10.2307/1911865

[2]   Guasch, J.L., Laffont, J.J. and Straub, S. (2008) Renegotiation of Concession Contracts in Latin America: Evidence from the Water and Transport Sectors. International Journal of Industrial Organization, 26, 421-442. http://dx.doi.org/10.1016/j.ijindorg.2007.05.003

[3]   Wang, R. (2000) Bidding and Renegotiation in Procurement Auctions. European Economic Review, 44, 1577-1597. http://dx.doi.org/10.1016/S0014-2921(98)00082-8

[4]   Roelofs, M.R. (2002) Common Value Auctions with Default: An Experimental Approach. Experimental Economics, 5, 233-252. http://dx.doi.org/10.1023/A:1020840420643

[5]   Kagel, J.H. and Levin, D. (2002) Common Value Auctions and the Winner’s Curse. Princeton University Press, New Jersey.

 
 
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