Capacity Choice and the Impact of Sunk Costs on Bidding Strategies in Procurement Auctions PDF Download
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Author: Jörg Budde
Publisher:
ISBN:
Category :
Languages : en
Pages : 14
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Book Description
This paper analyzes the impact of capacity costs on bidding strategies of firms participating in procurement auctions. More efficient firms will invest in advance due to their high probability of winning the auction while less efficient bidders prefer to wait with their investments until the outcome of the auction is known. However, in equilibrium both types of firms include coverage for their investment costs into their bids and therefore adopt a full cost pricing policy.
Author: Jörg Budde
Publisher:
ISBN:
Category :
Languages : en
Pages : 14
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Book Description
This paper analyzes the impact of capacity costs on bidding strategies of firms participating in procurement auctions. More efficient firms will invest in advance due to their high probability of winning the auction while less efficient bidders prefer to wait with their investments until the outcome of the auction is known. However, in equilibrium both types of firms include coverage for their investment costs into their bids and therefore adopt a full cost pricing policy.
Author: Jörg Budde
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This paper analyzes the impact of capacity costs on bidding strategies of firms participating in procurement auctions. More efficient firms will invest in advance due to their high probability of winning the auction while less efficient bidders prefer to wait with their investments until the outcome of the auction is known. However, in equilibrium both types of firms include a coverage for their investment costs into their bids and therefore adopt a full cost pricing policy.
Author:
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 366
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Author: Viplav Saini
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
We utilize laboratory experiments to study behavior in sequential procurement auctions where winning an auction round increases a bidder's future costs. The game admits competitive as well as bid-rotation style collusive equilibria. We find that (a) bidders show some propensity to account for the opportunity cost of winning an auction, but underestimate its magnitude; (b) revealing all bids (instead of only the winning bid) after each round leads to dramatically higher procurement costs. The rise in procurement costs is accompanied by an increase in very high (extreme) bids, a fraction of which appear to be collusive in nature.
Author: Xiaoyong Zheng
Publisher:
ISBN:
Category :
Languages : en
Pages : 406
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Author: Sebastian Schwenen
Publisher:
ISBN:
Category :
Languages : en
Pages : 29
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Author: Niels Blomgren-Hansen
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ISBN:
Category :
Languages : en
Pages :
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The paper analyzes the excess entry hypothesis for sealed-bid first-price public procurement auctions. The hypothesis is proved analytically for any feasible combination of bid preparation cost and bid evaluation cost when the bidders face a rectangular cost density function and confirmed in numerical simulations based on a family of flexible cost density functions. The excess entry hypothesis implies that the procurer may reduce both his own cost and the social cost by imposing a positive fee on the bids. Sequential search is a superior strategy to a public procurement auction whether or not the procurer imposes an optimal fee on the bids.
Author:
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ISBN: 9783863040536
Category :
Languages : en
Pages : 0
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Author: Mitsuhiro Nihashi
Publisher:
ISBN:
Category :
Languages : en
Pages : 54
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Author: Ece Özdemir
Publisher:
ISBN:
Category :
Languages : en
Pages :
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