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Intermediary Search for Suppliers in Procurement Auctions

In many procurement auctions, entrants determine whether to participate in auctions accounting for their roles of intermediaries who search for the best (or the cheapest) input suppliers. We build on a procurement auction model with entry, combining with intermediary search for suppliers. The novel feature is that costs of bidders are endogenously determined by suppliers who strategically charge input prices. We show the existence of an equilibrium with price dispersion for inputs, generating cost heterogeneity among bidders. Interestingly, the procurement cost may rise as the number of potential bidders increases. (author's abstract) / Series: Department of Economics Working Paper Series

Identiferoai:union.ndltd.org:VIENNA/oai:epub.wu-wien.ac.at:4628
Date08 1900
CreatorsHonda, Jun
PublisherWU Vienna University of Economics and Business
Source SetsWirtschaftsuniversität Wien
LanguageEnglish
Detected LanguageEnglish
TypePaper, NonPeerReviewed
Formatapplication/pdf
Relationhttp://www.wu.ac.at/economics/forschung/wp/, http://epub.wu.ac.at/4628/

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