Design Competition Through Multidimensional Auctions

Che, Yeon‐Koo

doi:10.2307/2555752

Cited by 684 publications

(649 citation statements)

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“…First, there is a large literature looking at the mechanisms by which the outcome of the procurement process could be improved, namely by taking factors other than price into account in the award process. The literature on scoring auctions starting with Che (1993) …ts within this group. Second, we have a literature describing the consequences arising from the absence of contract enforcement, by taking as …xed the institutional framework (e.g.…”

Section: The Modelmentioning

confidence: 99%

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Procurement with Unenforceable Contract Time and the Law of Liquidated Damages

Dosi

Moretto

2013

Journal of Law, Economics, and Organization

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Time overruns are common in public works and are not con…ned to inherently complex tasks. One explanation advanced in this paper is that bidders can undergo unpredictable changes in production costs which generate an option value of waiting. By exploiting the real-option approach, we examine how the inability to force sellers to meet the contract time in ‡uences their bidding behaviour, and how this can ultimately a¤ect the parties' expected payo¤s. Further, we examine the outcome of the bidding process when legal rules prevent the promisee from contracting for damage measures which would grant more than her lost expectation. We show that when the pre-agreed compensatory payments prove insu¢ cient to discourage delayed orders, setting a liquidated damages clause would not lead to a Pareto superior outcome with respect to the no-damage-for delay condition. While such a clause would increase the seller's expected payo¤, the buyer's expected payo¤ is lower than when the contract does not provide for any compensation for late-delivery.

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Section: The Modelmentioning

confidence: 99%

“…7 The buyer values the project B, provided that it will be completed within the date established at the contract award. To economize on notation, without loss of generality, we shall set the contract time at zero.…”

Section: The Modelmentioning

confidence: 99%

Procurement with Unenforceable Contract Time and the Law of Liquidated Damages

Dosi

Moretto

2013

Journal of Law, Economics, and Organization

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“…2 or competitive bidding mechanisms. Although concessions are still frequently awarded by a selection process based on a subjective evaluation of one or more quantitative or qualitative criteria, recent years have witnessed an increasing interest in using bidding processes 3 , which, particularly when the service is fairly standard (Bajari and Tadelis, 2001), provide a potentially effective mechanism for stimulating interest among a broader range of potential investors and selecting the best proposal.…”

Section: Introductionmentioning

confidence: 99%

“…In particular, we compare the two award criteria ("highest concession fee" vs. "lowest price") by looking at two alternative concessioning conditions which approximate actual practices: a 3 For example, as far as spectrum licences are concerned, New Zealand legislated spectrum auctions in 1989, as did the United Kingdom in 1990. In the United States, where licences used to be assigned after comparative hearings held by the Federal Communications Commission (FCC), and then lotteries, Congress passed legislation giving the FCC the authority to auction licenses in 1993 (McMillan, 1994).…”

Section: Introductionmentioning

confidence: 99%

“…Although the paper focuses on concessions, our analysis is related to the literature on procurement, namely to the branch of the literature which considers how to include quality other than sale price in the procurement process (Laffont and Tirole, 1987;Che, 1993). In particular, Che shows that the optimal buying mechanism distorts quality provided by the suppliers downwards relative to the first best levels.…”

Section: Introductionmentioning

confidence: 99%

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Auctioning Monopoly Franchises: Award Criteria and Service Launch Requirements

Moretto

Dosi

2009

SSRN Journal

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SummaryWe study the competition to acquire the exclusive right to operate an infrastructure service, by comparing two different specifications for the financial proposals -"lowest price to consumers" vs "highest concession fee", and two alternative contractual arrangements: a contract which imposes the obligation to immediately undertake the investment required to operate the concessioned service and a contract which simply assigns to the winning bidder the right to supply the market at a date of her choosing. By comparing the returns of these alternative award criteria and concessioning conditions, we show that concessioning without imposing rollout time limits may or may not provide a higher expected social value, depending on the bidding rule used to allocate the contract. In turn, the relative advantages of each award criterion are affected by the concessioning conditions. Keywords AbstractWe study the competition to acquire the exclusive right to operate an infrastructure service, by comparing two different specifications for the financial proposals -"lowest price to consumers" v s "highest concession fee", and two alternative contractual arrangements: a contract which imposes the obligation to immediately undertake the investment required to operate the concessioned service and a contract which simply assigns to the winning bidder the right to supply the market at a date of her choosing. By comparing the returns of these alternative award criteria and concessioning conditions, we show that concessioning without imposing rollout time limits may or may not provide a higher expected social value, depending on the bidding rule used to allocate the contract. In turn, the relative advantages of each award criterion are affected by the concessioning conditions.

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Supplier Selection

Beil

2011

Wiley Encyclopedia of Operations Research and Management Science

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Supplier selection is the process by which firms identify, evaluate, and contract with suppliers. The supplier selection process deploys a tremendous amount of a firm's financial resources. In return, firms expect significant benefits from contracting with suppliers offering high value. This article describes the typical steps of supplier selection processes: identifying suppliers, soliciting information from suppliers, setting contract terms, negotiating with suppliers, and evaluating suppliers. It highlights why each step is important, how the steps are interrelated, and how the resulting complexity provides fertile ground for ORMS research.

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Design Competition Through Multidimensional Auctions

Cited by 684 publications

References 8 publications

Procurement with Unenforceable Contract Time and the Law of Liquidated Damages

Procurement with Unenforceable Contract Time and the Law of Liquidated Damages

Auctioning Monopoly Franchises: Award Criteria and Service Launch Requirements

Supplier Selection

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