Auctions with bid credits and resale

Loertscher, Simon; Marx, Leslie M.

doi:10.1016/j.ijindorg.2017.09.002

Cited by 8 publications

(8 citation statements)

References 28 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

Section: Introductionmentioning

confidence: 99%

“…14 Both subsidies and bidding credits are employed in the U.S. by the Federal Communications Commission in spectrum auctions and under the Buy America Act, see Athey et al (2013) and Loertscher and Marx (2017). Subsidies are used in California state highway procurement (Athey et al, 2013) and twenty-five U.S. states provide bid preferences or set-asides for in-state bidders or products (Loertscher and Marx, 2017). While the level of a bidding credit to be applied is usually known, this is not true in the Virginia public procurement market, where suppliers know whether they are eligible to receive a bid credit, but they do not know the bid credit level that will be applied (Mummalaneni, 2019).…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Supplier Diversity Before the Time of Cholera

Alcalde

Dahm

2020

SSRN Journal

View full text Add to dashboard Cite

Procurement programs often aim to rely on a diverse pool of suppliers, besides achieving cost effectiveness. We propose complementing a share auction for dual sourcing with affirmative action to create an endogenous set-aside for a high-cost supplier. In our model more intensive affirmative action strengthens the targeted provider. This has the potential to level the playing field, inducing more competitive procurement overall. Our main result provides a condition under which the endogenous set-aside not only guarantees a very substantial share for the high-cost supplier, but also reduces the buyer's provision cost compared to a first-price auction. This result is robust to variations of our benchmark model, including the assumptions specifying what providers know about each other, and how affirmative action programs are implemented. We also illustrate how our approach can help to reduce the severity and likelihood of health product shortages, such as those that occurred during the recent COVID-19 outbreak.

show abstract

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Supplier Diversity Before the Time of Cholera

Alcalde

Dahm

2020

SSRN Journal

View full text Add to dashboard Cite

show abstract

“…In contrast, subsidizing small bidders directly increases revenue and the pro…ts of small bidders without much cost in e¢ ciency. See also Loertscher and Marx (2016) and Pai and Vohra (2012).…”

mentioning

confidence: 99%

Market Power and Welfare in Asymmetric Divisible Good Auctions

Manzano

Vives

2016

SSRN Journal

View full text Add to dashboard Cite

We analyze a divisible good uniform-price auction that features two groups each with a …nite number of identical bidders. At equilibrium the relative market power (price impact) of a group increases with the precision of its private information and declines with its transaction costs. An increase in transaction costs and/or a decrease in the precision of a bidding group's information induces a strategic response from the other group, which thereafter attenuates its response to both private information and prices. A "stronger" bidding group -which has more precise private information, faces lower transaction costs, and is more oligopsonistic-has more price impact and so will behave competitively only if it receives a higher per capita subsidy rate. When the strong group values the asset no less than the weak group, the expected deadweight loss increases with the quantity auctioned and also with the degree of payo¤ asymmetries. Price impact and the deadweight loss may be negatively associated. The results are consistent with the available empirical evidence.

show abstract

“…In contrast, subsidizing small bidders directly increases revenue and the profits of small bidders without much cost in efficiency. See also Loertscher and Marx (2017) and Pai and Vohra (2012).…”

mentioning

confidence: 99%

Market power and welfare in asymmetric divisible good auctions

Manzano

Vives

2021

View full text Add to dashboard Cite

We analyze a divisible good uniform‐price auction that features two groups, each with a finite number of identical bidders, who compete in demand schedules. In the linear‐quadratic‐normal framework, this paper presents conditions under which the unique equilibrium in linear demands exists and derives novel comparative statics results that highlight the interaction between payoff and information parameters with asymmetric groups. We find that the strategic complementarity in the slopes of traders' demands is reinforced by inference effects from prices, and we display the role of payoff and information asymmetries in explaining deadweight losses. Furthermore, price impact and the deadweight loss need not move together, and market integration may reduce welfare. The results are consistent with the available empirical evidence.

show abstract

Auctions with bid credits and resale

Cited by 8 publications

References 28 publications

Supplier Diversity Before the Time of Cholera

Supplier Diversity Before the Time of Cholera

Market Power and Welfare in Asymmetric Divisible Good Auctions

Market power and welfare in asymmetric divisible good auctions

Contact Info

Product

Resources

About