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Multidimensional auctions for long-term procurement contracts under the threat of early exit

the case of conservation auctions

Di Corato, Luca and Dosi, Cesare and Moretto, Michele (2015). Multidimensional auctions for long-term procurement contracts under the threat of early exit. Uppsala: (NL, NJ) > Dept. of Economics, Sveriges lantbruksuniversitet. Working paper series / Swedish University of Agricultural Sciences, Department of Economics ; 2015:06
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Abstract

In this paper we study how early-exit options, embedded in long-term procurement contracts which do not provide for sufficiently strong incentives against contract breach, can affect bidding behaviors in multidimensional procurement auctions and the parties' expected payoffs. We show first that bidders' payoff is lower when competing for contracts with unenforceable contract terms. Secondly, that neglecting the risk of opportunistic behavior by sellers can lead to contract awards that do not maximize the buyer's potential payoff. Finally, we make suggestions about how to mitigate potential misallocations, by pointing out the role of eligibility rules and competition among bidders.

Authors/Creators:Di Corato, Luca and Dosi, Cesare and Moretto, Michele
Title:Multidimensional auctions for long-term procurement contracts under the threat of early exit
Subtitle:the case of conservation auctions
Series/Journal:Working paper series / Swedish University of Agricultural Sciences, Department of Economics (1401-4068)
Year of publishing :31 August 2015
Depositing date:31 August 2015
Number:2015:06
Number of Pages:42
Place of Publication:Uppsala
Publisher:Department of Economics, Swedish University of Agricultural Sciences
ISSN:1401-4068
Language:English
Publication Type:Report
Full Text Status:Public
Agris subject categories.:X Agricola extesions > X70 Economics and management
Subjects:(A) Swedish standard research categories 2011 > 5 Social Sciences > 502 Economics and Business > Economics
Agrovoc terms:contracts, purchasing, risk factors, economic analysis, auctions, land management, nature conservation, models
Keywords:public procurement, scoring auctions, contract breach, real options, conservation contracts
URN:NBN:urn:nbn:se:slu:epsilon-e-2882
Permanent URL:
http://urn.kb.se/resolve?urn=urn:nbn:se:slu:epsilon-e-2882
ID Code:12551
Faculty:NJ - Fakulteten för naturresurser och jordbruksvetenskap
Department:(NL, NJ) > Dept. of Economics
Deposited By: DR LUCA DI CORATO
Deposited On:01 Sep 2015 08:45
Metadata Last Modified:07 Mar 2016 11:39

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