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Heterogeneity-Promoting Optimal Procurement

Universitat Pompeu Fabra Economics Working Paper No. 377

Posted: 4 Oct 1999

See all articles by Juan-José Ganuza

Juan-José Ganuza

Universitat Pompeu Fabra (UPF) - Faculty of Economic and Business Sciences

Lambros Pechlivanos

Athens University of Economics and Business - Department of International and European Economic Studies

Abstract

When procurement takes place in the presence of horizontally differentiated contractors, the design of the object being procured affects the resulting degree of competition. This paper highlights the interaction between the optimal procurement mechanism and the design choice. Contrary to conventional wisdom, the sponsor's design choice, instead of homogenizing the market to generate competition, promotes heterogeneity.

JEL Classification: L51, H57, D44

Suggested Citation

Ganuza, Juan and Pechlivanos, Lambros, Heterogeneity-Promoting Optimal Procurement. Universitat Pompeu Fabra Economics Working Paper No. 377, Available at SSRN: https://ssrn.com/abstract=163281

Juan Ganuza (Contact Author)

Universitat Pompeu Fabra (UPF) - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
(34-93) 542 27 19 (Phone)
(34-98) 542 17 46 (Fax)

Lambros Pechlivanos

Athens University of Economics and Business - Department of International and European Economic Studies ( email )

Patission 76
GR-10434 Athens
Greece
+30 210 8203728 (Phone)

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