Procurement auctions with renegotiation and wealth constraints

Wei Shiun Chang, Timothy C. Salmon, Krista J. Saral

研究成果: Article同行評審

6 引文 斯高帕斯(Scopus)

摘要

Renegotiation is a common practice in procurement auctions which allows for postauction price adjustments and is nominally intended to deal with the problem that sellers might underestimate the eventual costs of a project during the auction. Using a combination of theory and experiments, we examine the effectiveness of renegotiation at solving this problem. Our findings demonstrate that renegotiation is rarely successful at solving the problem of sellers misestimating costs. The primary effect of allowing renegotiation is that it advantages sellers who possess a credible commitment of default should they have underbid the project. Renegotiation allows these weaker types of sellers to win more often and it also allows them to leverage their commitment of default into higher prices in renegotiation from a buyer.

原文English
頁(從 - 到)1684-1704
頁數21
期刊Economic Inquiry
54
發行號3
DOIs
出版狀態Published - 2016 7月 1

All Science Journal Classification (ASJC) codes

  • 一般商業,管理和會計
  • 經濟學與計量經濟學

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