Favoritism, anonimity and renegotiation in procurement

Autores
Weinschelbaum, Federico; Arozamena, Leandro; Ganuza, Juan Jose
Año de publicación
2018
Idioma
inglés
Tipo de recurso
documento de conferencia
Estado
versión publicada
Descripción
This paper shed2 light on a mechanism for implementing favoritism even in a symmetric framework. We analyze a procurement setting in which the optimal design of the project is unknown. The sponsor has to invest in specifying the project. The larger the investment, the higher the probability that the initial design is optimal. Otherwise, a bargaining process between the winning firm and the sponsor takes place. The bargaining benefits of the winning firm are larger when this is the favored firm. Given this comparative advantage, the favored firm bids more aggressively and then, it wins more often than standard firms. We show that the sponsor invests less in specifying the initial design when favoritism is stronger. Underinvestment in design specification is a tool for giving a comparative advantage to the favored firm.
Facultad de Ciencias Económicas
Materia
Ciencias Económicas
Auctions
Favoritism
Auction Design
Renegotiation
Nivel de accesibilidad
acceso abierto
Condiciones de uso
http://creativecommons.org/licenses/by-nc-sa/4.0/
Repositorio
SEDICI (UNLP)
Institución
Universidad Nacional de La Plata
OAI Identificador
oai:sedici.unlp.edu.ar:10915/169186
Acceder
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repository_id_str 1329
network_name_str SEDICI (UNLP)
spelling Favoritism, anonimity and renegotiation in procurementWeinschelbaum, FedericoArozamena, LeandroGanuza, Juan JoseCiencias EconómicasAuctionsFavoritismAuction DesignRenegotiationThis paper shed2 light on a mechanism for implementing favoritism even in a symmetric framework. We analyze a procurement setting in which the optimal design of the project is unknown. The sponsor has to invest in specifying the project. The larger the investment, the higher the probability that the initial design is optimal. Otherwise, a bargaining process between the winning firm and the sponsor takes place. The bargaining benefits of the winning firm are larger when this is the favored firm. Given this comparative advantage, the favored firm bids more aggressively and then, it wins more often than standard firms. We show that the sponsor invests less in specifying the initial design when favoritism is stronger. Underinvestment in design specification is a tool for giving a comparative advantage to the favored firm.Facultad de Ciencias Económicas2018-11info:eu-repo/semantics/conferenceObjectinfo:eu-repo/semantics/publishedVersionObjeto de conferenciahttp://purl.org/coar/resource_type/c_5794info:ar-repo/semantics/documentoDeConferenciaapplication/pdfhttp://sedici.unlp.edu.ar/handle/10915/169186enginfo:eu-repo/semantics/altIdentifier/isbn/978-987-28590-6-0info:eu-repo/semantics/altIdentifier/url/https://bd.aaep.org.ar/anales/works/works2018/weinschelbaum.pdfinfo:eu-repo/semantics/altIdentifier/issn/1852-0022info:eu-repo/semantics/openAccesshttp://creativecommons.org/licenses/by-nc-sa/4.0/Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0)reponame:SEDICI (UNLP)instname:Universidad Nacional de La Platainstacron:UNLP2025-10-22T17:24:25Zoai:sedici.unlp.edu.ar:10915/169186Institucionalhttp://sedici.unlp.edu.ar/Universidad públicaNo correspondehttp://sedici.unlp.edu.ar/oai/snrdalira@sedici.unlp.edu.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:13292025-10-22 17:24:25.523SEDICI (UNLP) - Universidad Nacional de La Platafalse
dc.title.none.fl_str_mv Favoritism, anonimity and renegotiation in procurement
title Favoritism, anonimity and renegotiation in procurement
spellingShingle Favoritism, anonimity and renegotiation in procurement
Weinschelbaum, Federico
Ciencias Económicas
Auctions
Favoritism
Auction Design
Renegotiation
title_short Favoritism, anonimity and renegotiation in procurement
title_full Favoritism, anonimity and renegotiation in procurement
title_fullStr Favoritism, anonimity and renegotiation in procurement
title_full_unstemmed Favoritism, anonimity and renegotiation in procurement
title_sort Favoritism, anonimity and renegotiation in procurement
dc.creator.none.fl_str_mv Weinschelbaum, Federico
Arozamena, Leandro
Ganuza, Juan Jose
author Weinschelbaum, Federico
author_facet Weinschelbaum, Federico
Arozamena, Leandro
Ganuza, Juan Jose
author_role author
author2 Arozamena, Leandro
Ganuza, Juan Jose
author2_role author
author
dc.subject.none.fl_str_mv Ciencias Económicas
Auctions
Favoritism
Auction Design
Renegotiation
topic Ciencias Económicas
Auctions
Favoritism
Auction Design
Renegotiation
dc.description.none.fl_txt_mv This paper shed2 light on a mechanism for implementing favoritism even in a symmetric framework. We analyze a procurement setting in which the optimal design of the project is unknown. The sponsor has to invest in specifying the project. The larger the investment, the higher the probability that the initial design is optimal. Otherwise, a bargaining process between the winning firm and the sponsor takes place. The bargaining benefits of the winning firm are larger when this is the favored firm. Given this comparative advantage, the favored firm bids more aggressively and then, it wins more often than standard firms. We show that the sponsor invests less in specifying the initial design when favoritism is stronger. Underinvestment in design specification is a tool for giving a comparative advantage to the favored firm.
Facultad de Ciencias Económicas
description This paper shed2 light on a mechanism for implementing favoritism even in a symmetric framework. We analyze a procurement setting in which the optimal design of the project is unknown. The sponsor has to invest in specifying the project. The larger the investment, the higher the probability that the initial design is optimal. Otherwise, a bargaining process between the winning firm and the sponsor takes place. The bargaining benefits of the winning firm are larger when this is the favored firm. Given this comparative advantage, the favored firm bids more aggressively and then, it wins more often than standard firms. We show that the sponsor invests less in specifying the initial design when favoritism is stronger. Underinvestment in design specification is a tool for giving a comparative advantage to the favored firm.
publishDate 2018
dc.date.none.fl_str_mv 2018-11
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dc.language.none.fl_str_mv eng
language eng
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info:eu-repo/semantics/altIdentifier/issn/1852-0022
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
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Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0)
eu_rights_str_mv openAccess
rights_invalid_str_mv http://creativecommons.org/licenses/by-nc-sa/4.0/
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