Dynamic auction environment with subcontracting

• 成果类型: Article
• 署名作者: Jeziorski, Przemyslaw; Krasnokutskaya, Elena
• 署名单位: University of California System; University of California Berkeley; Johns Hopkins University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12154
• 发表日期: 2016
• 页码: 751-791
• 关键词: asymmetric 1st-price auctions; procurement auctions; resale markets; COMPETITION; INFORMATION; equilibria; EXISTENCE; oligopoly; COSTS

摘要

This article provides evidence on the role of subcontracting in the auction-based procurement setting with private cost variability and capacity constraints. We demonstrate that subcontracting allows bidders to modify their costs realizations in a given auction as well as to control their future costs by reducing backlog accumulation. Restricting access to subcontracting raises procurement costs for an individual project by 12% and reduces the number of projects completed in equilibrium by 20%. The article explains methodological and market design implications of subcontracting availability.