An experimental study of bidding behavior in procurement auctions with subcontract bids: Profits, efficiency, and policy implications

Naoki Watanabe, Jun Nakabayashi

研究成果: Conference contribution

抜粋

In order to lower the estimates of the total project costs, prime contractors often solicit bids from subcontractors which can complete their works with lower costs than they do by themselves, prior to submitting their own bids in procurement auctions. This paper presents a simple model of such two-stage auctions and shows some observations in a laboratory experiment conducted to examine theoretical predictions. Our main observations are as follows. (1) Subcontractors bid more aggressively (i.e., they lower their bids) in the first-price subcontract auctions, as compared to the case where there is no second-stage competition among prime contractors. (2) Second-price subcontract auctions render higher profits to prime contractors than first-price auctions. (3) First-price subcontract auctions more likely achieve ex post efficient allocations of a subcontract work than second-price auctions. The policy implications are also discussed.

元の言語English
ホスト出版物のタイトルSICE 2011 - SICE Annual Conference 2011, Final Program and Abstracts
出版者Society of Instrument and Control Engineers (SICE)
ページ1202-1207
ページ数6
ISBN(印刷物)9784907764395
出版物ステータスPublished - 2011 1 1
外部発表Yes
イベント50th Annual Conference on Society of Instrument and Control Engineers, SICE 2011 - Tokyo, Japan
継続期間: 2011 9 132011 9 18

出版物シリーズ

名前Proceedings of the SICE Annual Conference

Other

Other50th Annual Conference on Society of Instrument and Control Engineers, SICE 2011
Japan
Tokyo
期間11/9/1311/9/18

ASJC Scopus subject areas

  • Control and Systems Engineering
  • Computer Science Applications
  • Electrical and Electronic Engineering

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  • これを引用

    Watanabe, N., & Nakabayashi, J. (2011). An experimental study of bidding behavior in procurement auctions with subcontract bids: Profits, efficiency, and policy implications. : SICE 2011 - SICE Annual Conference 2011, Final Program and Abstracts (pp. 1202-1207). [6060516] (Proceedings of the SICE Annual Conference). Society of Instrument and Control Engineers (SICE).