On the Benefits of Set-Asides
Bibliographic Data
| ID | 19082036 |
|---|---|
| Authors | Philippe Jehiel (0000-0003-2327-3186, Paris School of Economics (Ecole des Ponts, ParisTech) and University College London, corresponding author), Lubomir Lamy (0000-0002-8428-1369, corresponding author), Laurent Lamy (CIRED) |
| Year | 2019 |
| Volume | 18 |
| Issue | 4 |
| Pages | 1655-1696 |
| Publication date | 2019-05-11 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of the European Economic Association (JOURNAL) |
| Journal identifiers | ISSN: 1542-4766 • E-ISSN: 1542-4774 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1093/jeea/jvz021 |
| OpenAlex | W2530527880 |
| Language | EN |
| References cited | 41 |
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
Business · Common value auction · Economic rent · Economics · Industrial organization · Microeconomics · Procurement · Auction Theory and Applications · Computer Science · Law, Economics, and Judicial Systems · Public Procurement and Policy · Marketing
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Optimal Auction Design
On Discrimination in Auctions with Endogenous Entry
Core-selecting package auctions
A Mechanism Design Approach to the Tiebout Hypothesis
The Biggest Auction Ever
Do Small Business Set-Asides Increase the Cost of Government Contracting
What Really Matters in Auction Design
| Citation velocity | historical |
|---|---|
| Highly cited | No |