S-WoPEc
 
Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
Department Economics, Swedish University of Agricultural Sciences Working Paper Series, Department Economics, Swedish University of Agricultural Sciences

No 2015:6:
Multidimensional auctions for long-term procurement contracts under the threat of early exit: the case of conservation auctions

Luca Di Corato (), Cesare Dosi () and Michele Moretto ()

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.

Keywords: Public procurement; Scoring auctions; Contract breach; Real options; Conservation contracts; (follow links to similar papers)

JEL-Codes: C61; D44; D86; Q24; Q28; (follow links to similar papers)

35 pages, August 30, 2015

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

dicorato_l_etal_150831.pdf    PDF-file
Download Statistics

Questions (including download problems) about the papers in this series should be directed to Elizabeth Hillerius ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:slueko:2015_006 This page was generated on 2015-09-02 14:14:24