Discriminatory public procurement policy and cost reduction incentives

• 成果类型: Article
• 署名作者: Naegelen, F; Mougeot, M
• 署名单位: Universite Marie et Louis Pasteur
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(97)00068-6
• 发表日期: 1998
• 页码: 349-367
• 关键词: Auctions; DISCRIMINATION; procurement; moral hazard

摘要

Discriminating in favor of domestic suppliers in the award of government procurement contracts is a widespread practice. In this paper, we extend the previous analysis of McAfee and McMillan (1989) [Government procurement and international trade. Journal of International Economics 26, 291-308] and Branco (1994) [Favoring domestic firms in procurement contracts. Journal of International Economics 37, 65-80] by considering in the same model the bidding competition stimulation effect and the favoritism effect. We prove that the optimal policy can be implemented by a modified Vickrey auction or by a complex modified first price auction. We also consider that firms can reduce their cost by a nonobservable effort. We show that taking moral hazard into account does not modify the awarding rule. but that the government must use the payment rule to require a greater level of effort from the favored firm. (C) 1998 Elsevier Science S.A.