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Preferential treatment in procurement auctions through information revelation

Authors
Journal
Economics Letters
0165-1765
Publisher
Elsevier
Volume
117
Issue
3
Identifiers
DOI: 10.1016/j.econlet.2012.07.001
Keywords
  • Procurement
  • Information Revelation
  • Discriminatory Policy
  • Asymmetric Auctions

Abstract

Abstract We study a model of procurement auctions in which information policies can be used to treat two heterogeneous suppliers asymmetrically. The buyer is shown to be better off revealing information about her preferences to the weak supplier only, when there is a sufficient cost difference between the weak and the strong. Conversely, when the two competitors have similar cost structures, for the buyer it is best to disclose her preferences publicly.

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