
Abstract
We consider the procurement of a complex, indivisible good when bid preparation is costly, assuming a population of heterogeneous contractors. Shortlisting is introduced to implement the optimal number of bidders, and we explore whether the procurer should reimburse the nonrecoverable cost of preparing a bid in whole or in part. We find that a reimbursement policy is profitable for the procurer only if performance and bidding costs are negatively correlated. Moreover, negative rebates (entry fees) always dominate positive rebates.
Item Type: | Paper |
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Keywords: | Procurement, Auctions, Entry |
Faculties: | Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > A7 - Auktionen, Anreizprobleme und Wettbewerb |
Subjects: | 300 Social sciences > 330 Economics |
JEL Classification: | D44, D45 |
URN: | urn:nbn:de:bvb:19-epub-13385-7 |
Language: | English |
Item ID: | 13385 |
Date Deposited: | 10. Jul 2012, 13:09 |
Last Modified: | 04. Nov 2020, 12:53 |