On the Benefits of Set-Asides
Philippe Jehiel
(1, 2)
,
Laurent Lamy
(3)
Philippe Jehiel
- Fonction : Auteur
- PersonId : 1151454
Laurent Lamy
- Fonction : Auteur
- PersonId : 1332977
- IdRef : 245401423
Résumé
Set-aside programs that consist in forbidding access to specific participants are commonly used in procurement auctions. We show that when the set of potential participants is composed of an incumbent (whose entry costs are already sunk) and of entrants who show up endogenously (in such a way that their expected rents are fixed by outside options), then it is always beneficial for revenues to exclude the incumbent in the Vickrey auction. This exclusion principle is generalized to dominant-strategy auctions that favor the incumbent in the sense that the incumbent would always get the good when valuing it most. By contrast, set-asides are not desirable if the incumbent’s payoff is included in the seller’s objective in the Vickrey auction, and more generally it is detrimental to exclude a bidder that is not favored.
Domaines
Economies et financesFormat du dépôt | Notice |
---|---|
Type de dépôt | Article dans une revue |
Résumé |
en
Set-aside programs that consist in forbidding access to specific participants are commonly used in procurement auctions. We show that when the set of potential participants is composed of an incumbent (whose entry costs are already sunk) and of entrants who show up endogenously (in such a way that their expected rents are fixed by outside options), then it is always beneficial for revenues to exclude the incumbent in the Vickrey auction. This exclusion principle is generalized to dominant-strategy auctions that favor the incumbent in the sense that the incumbent would always get the good when valuing it most. By contrast, set-asides are not desirable if the incumbent’s payoff is included in the seller’s objective in the Vickrey auction, and more generally it is detrimental to exclude a bidder that is not favored.
|
Titre |
en
On the Benefits of Set-Asides
|
Auteur(s) |
Philippe Jehiel
1, 2
, Laurent Lamy
3
1
PSE -
Paris School of Economics
( 301309 )
- 48 boulevard Jourdan 75014 Paris
- France
2
PJSE -
Paris Jourdan Sciences Economiques
( 578027 )
- 48 boulevard Jourdan 75014 Paris
- France
3
CIRED -
Centre International de Recherche sur l'Environnement et le Développement
( 1042364 )
- 45 bis, avenue de la Belle Gabrielle - 94736 Nogent-sur-Marne Cedex
- France
|
Volume |
18
|
Numéro |
4
|
Page/Identifiant |
1655-1696
|
Public visé |
Scientifique
|
Langue du document |
Anglais
|
Nom de la revue |
|
Vulgarisation |
Non
|
Comité de lecture |
Oui
|
Audience |
Internationale
|
Date de publication |
2020-08
|
Mots-clés (JEL) |
|
Domaine(s) |
|
DOI | 10.1093/jeea/jvz021 |
UT key WOS | 000586867300003 |
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