Competition under Incomplete Contracts and the Design of Procurement Policies

• 成果类型: Article
• 署名作者: Carril, Rodrigo; Gonzalez-Lira, Andres; Walker, Michael S.
• 署名单位: Pompeu Fabra University; Barcelona School of Economics; Pontificia Universidad Catolica de Chile
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282; 1944-7981
• DOI: 10.1257/aer.20221345
• 发表日期: 2026-02
• 页码: 535-581
• 关键词: regression discontinuity designs; 1st-price auctions; unobserved heterogeneity; spending evidence; measurement error; entry; price; PARTICIPATION; optimization; equilibrium

摘要

We study the effects of intensifying competition for contracts in the context of US Defense procurement. Leveraging a discontinuous regulation that mandates agencies to publicize certain contract opportunities, we document that expanding the set of bidders reduces award prices but deteriorates post-award performance in terms of cost overruns and delays. We develop and estimate an auction model with endogenous entry and stochastic execution performance, in which the buyer endogenously chooses the intensity of competition. Model estimates indicate substantial heterogeneity in performance across contractors and show that simple adjustments to the current regulation could provide significant savings in procurement spending.