Essays on procurement auctions

Abstract

Revenue Non-Equivalence in Multidimensional Procurement Auctions under newlineAsymmetry. We show by an example that the Revenue Equivalence in the Scoring newlineAuctions, as postulated by Che, no longer holds when the suppliers are asymmetric in their newlinecosts of production. newlineCorruption in Multidimensional Procurement Auctions under Asymmetry. We newlineexamine corruption in first- and second-score procurement auctions in an asymmetric bidder newlinesetting. We assume that the auction is delegated to an agent who possesses more information newlineabout quality than the procurer and is known to be corrupt with some probability. Using newlinethis information asymmetry, the corrupt agent asks for a bribe from one of two bidders newlineand promises to manipulate bids in return. We show that the agent approaches the weaker newlinefirm for higher levels of bidder asymmetry in both the auction formats. Our numerical newlinesimulations suggest that the buyer prefers the first-score auction when the stronger firm is newlineapproached by the agent in the second-score auction. If the weaker firm is favored on the newlineother hand, the buyer switches to the second-score auction if the probability of corruption newlineis high. Finally, our paper highlights the limited manipulation power of the agent in the newlinesecond-score auction. newlineModified Right of First Refusal and Endogenous Participation in Procurement newlineAuctions. We examine Right-of-First-Refusal(RoFR) in a procurement auction with newlineendogenous entry when potential suppliers face heterogeneous costs of participation. We newlineshow that granting RoFR to the firm facing a lower cost of participation generates a higher newlineexpected utility to the buyer than when there is no favouritism. Additionally, we propose newlinea modified version of the RoFR clause and show that in comparison to its parent form, the newlinerevised rule generates a higher expected utility to the buyer and provides better odds of newlinethe contract newline