Auctions versus negotiations: the effects of inefficient renegotiation

• 成果类型: Article
• 署名作者: Herweg, Fabian; Schmidt, Klaus M.
• 署名单位: University of Bayreuth; Leibniz Association; Ifo Institut; Center for Economic & Policy Research (CEPR)
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12189
• 发表日期: 2017
• 页码: 647-672
• 关键词: incomplete contracts; empirical-analysis; transaction costs; loss aversion; procurement; DESIGN

摘要

For the procurement of complex goods, the early exchange of information is important to avoid costly renegotiation. If the buyer can specify the main characteristics of possible design improvements in a complete contingent contract, scoring auctions implement the efficient allocation. If this is not feasible, the buyer must choose between a price-only auction (discouraging early information exchange) and bilateral negotiations with a preselected seller (reducing competition). Bilateral negotiations are superior if potential design improvements are important, if renegotiation is very costly, and if the buyer's bargaining position is strong. Moreover, negotiations provide stronger incentives for sellers to investigate design improvements.