On a possible benefit to bid takers from using multi-stage auctions
Article Abstract:
Multi-stage auctions let or sell billions of dollars worth of contracts and goods annually. Current theory on competitive bidding and auctions fails to explicate why a taker of a bid might want a multi-stage auction over a single-stage mechanism which might be more simple. Current theory has a tendency to completely overlook multi-stage mechanisms. The benefits of a multi-stage auction to the bid-taker are illustrated and documents. An example is provided in which bidders by costly information in stages.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1988
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On optimal competitive contracting
Article Abstract:
An example is offered of risk neutral bid-takers and bidders in which the bid-taker gets larger than expected revenue from auctioning an inefficient agreement than from auctioning an efficient contract. This happens because the winning bidder's expected contract profitability declines faster than the worth of the output produced under the contract. The value of output minus the winning bidder's expected profit therefore increases.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1987
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On optimal reservation prices in auctions
Article Abstract:
The effect of changes in auction formats on the expected revenues of bid-takers is examined. Emphasis is on changes in revenue when the reservation price or screening level changes the number of bidders. In the examples given, the losses brought on by a reduced number of bidders outweigh the benefits associated with non-trivial reservation prices.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1987
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