Teaching an old dog a new trick: Reserve price and unverifiable quality in repeated procurement

IF 1.2 4区 管理学 Q3 ECONOMICS Journal of Economics & Management Strategy Pub Date : 2022-12-22 DOI:10.1111/jems.12509
Gian Luigi Albano, Berardino Cesi, Alberto Iozzi
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Abstract

This paper shows that, in a repeated competitive procurement, a buyer can use the reserve price in a low-price auction as a “public”—hence nondiscriminatory—incentive device to elicit unverifiable quality. We study a model with many firms and one buyer, who is imperfectly informed on the firms' costs. When firms are ex ante identical, the provision of quality is sustained by a sufficiently high reserve price to reward firms for the quality provision and by the threat of setting a low reserve price forever, if quality is not delivered. The buyer can elicit the desired level of unverifiable quality provided her baseline valuation of the project is not too high and the net benefit from unverifiable quality is not too low. These results are robust to firms' heterogeneity in their time preferences when the punishment for a deviation is finite but sufficiently long.

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教老狗一个新把戏:重复采购中的底价和无法验证的质量
本文表明,在重复竞争性采购中,买家可以将低价拍卖中的底价作为“公共”——因此是非歧视性的——激励手段,以获得无法验证的质量。我们研究了一个有许多公司和一个买方的模型,买方对公司的成本了解不完全。当企业事前完全相同时,质量的提供是通过足够高的储备价格来维持的,以奖励提供质量的企业,并通过威胁如果质量不到位,将永远设定低的储备价格。如果买方对项目的基线估价不太高,且不可验证质量的净收益不太低,则买方可以获得所需的不可验证的质量水平。当对偏差的惩罚是有限的但足够长时,这些结果对企业时间偏好的异质性是稳健的。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
3.20
自引率
5.30%
发文量
43
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