Rational bidding in a procurement auction with subjective evaluations

B-Tier
Journal: International Journal of Industrial Organization
Year: 2016
Volume: 44
Issue: C
Pages: 60-67

Authors (2)

Goswami, Mridu Prabal (not in RePEc) Wettstein, David (Ben Gurion University of the N...)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In practice, procurement auctions often involve subjective evaluations of bids, especially when consisting of quality or design parameters which are hard to quantify. We formally define a notion of subjectivity in an auction environment and analyze the implications for rational bidding behavior. Our findings explain some observed bidding behaviors that are inconsistent with standard equilibrium predictions. Finally we examine the way subjectivity facilitates the practice of favoritism on part of the auctioneer.

Technical Details

RePEc Handle
repec:eee:indorg:v:44:y:2016:i:c:p:60-67
Journal Field
Industrial Organization
Author Count
2
Added to Database
2026-01-29