at Google ScholarTitle data
Herweg, Fabian ; Schwarz, Marco A.:
Optimal Cost Overruns : Procurement Auctions with Renegotiation.
In: International Economic Review.
Vol. 59
(2018)
Issue 4
.
- pp. 1995-2021.
ISSN 0020-6598
DOI: https://doi.org/10.1111/iere.12327
Abstract in another language
Cost overrun is ubiquitous in public procurement. We argue that this can be the result of a constrained optimal award procedure: The procurer awards the contract via a price‐only auction and cannot commit not to renegotiate. If cost differences are more pronounced for a fancy than a standard design, it is optimal to fix the standard design ex ante. If renegotiation takes place and the fancy design has higher production costs or the contractor's bargaining position is strong, the final price exceeds the initial price. Moreover, the procurer cannot benefit from using a scoring auction.
Further data
| Item Type: | Article in a journal |
|---|---|
| Refereed: | Yes |
| Keywords: | Auction; Cost Overrun; Procurement; Renegotiation |
| Subject classification: | JEL Codes: D44, D82, H57 |
| Institutions of the University: | Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics VIII: International Competition Policy > Chair Economics VIII: International Competition Policy - Univ.-Prof. Dr. Fabian Herweg Faculties Faculties > Faculty of Law, Business and Economics Faculties > Faculty of Law, Business and Economics > Department of Economics Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics VIII: International Competition Policy |
| Result of work at the UBT: | Yes |
| DDC Subjects: | 300 Social sciences 300 Social sciences > 330 Economics |
| Date Deposited: | 03 Dec 2019 08:18 |
| Last Modified: | 14 Sep 2022 12:30 |
| URI: | https://eref.uni-bayreuth.de/id/eprint/40915 |