at Google ScholarTitle data
Herweg, Fabian ; Schmidt, Klaus M.:
Procurement with Unforeseen Contingencies.
In: Management Science.
Vol. 66
(2020)
Issue 5
.
- pp. 2194-2212.
ISSN 1526-5501
DOI: https://doi.org/10.1287/mnsc.2019.3290
Abstract in another language
A buyer who wants to procure a complex good is often aware that there may be flaws in her initial design, but she does not know what they look like. Potential sellers who discover flaws have no incentive to reveal them early if the buyer uses a price-only auction. We derive an efficient mechanism that induces all sellers to report flaws early and that allocates the project to the seller with the lowest cost. We show that this can be implemented with a simple two-stage auction that does not require any prior knowledge of the set of possible flaws.
Further data
| Item Type: | Article in a journal |
|---|---|
| Refereed: | Yes |
| Keywords: | Procurement; Renegotiation; Auctions; Design flaws; Adaptation costs; Behavioral contract theory |
| Institutions of the University: | Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics VIII: International Competition Policy 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 |
| Result of work at the UBT: | Yes |
| DDC Subjects: | 300 Social sciences 300 Social sciences > 330 Economics |
| Date Deposited: | 05 Nov 2020 08:09 |
| Last Modified: | 20 Oct 2022 08:06 |
| URI: | https://eref.uni-bayreuth.de/id/eprint/59216 |