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Full-Text Articles in Public Economics
Common-Value Procurement Auctions With Renegotiation, Rimvydas Baltaduonis, Lucas Rentschler
Common-Value Procurement Auctions With Renegotiation, Rimvydas Baltaduonis, Lucas Rentschler
Economics Faculty Publications
This note contains the equilibrium bid functions for two types of common-value procurement auctions: 1) a procurement auction in which bids represent an enforceable contract; 2) a procurement auction in which, upon learning the true cost of supplying the good, the winning bidder can renegotiate the contract with the buyer, and each bidder must submit a bond with their bid, which is returned at the end of the auction unless they are the low bidder and renegotiate the contract.