2015/08/01 by Jun Honda, Honda, Jun
Business, Management and Accounting · Decision Sciences · #Auction Theory and Applications #Consumer Market Behavior and Pricing #Supply Chain and Inventory Management
paper · pdf · doi:10.57938/70eb3c20-0bf1-4450-b201-6e4a9fb3156f
openalex publication_date 2015/08/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/01
In many procurement auctions, entrants determine whether to participate in auctions accounting for their roles of intermediaries who search for the best (or the cheapest) input suppliers. We build on a procurement auction model with entry, combining with intermediary search for suppliers. The novel feature is that costs of bidders are endogenously determined by suppliers who strategically charge input prices. We show the existence of an equilibrium with price dispersion for inputs, generating cost heterogeneity among bidders. Interestingly, the procurement cost may rise as the number of potential bidders increases. (author's abstract)