Munich Personal RePEc Archive

Communication of Preferences in Contests for Contracts

Kaplan, Todd R (2008): Communication of Preferences in Contests for Contracts.

[img]
Preview
PDF
MPRA_paper_18696.pdf

Download (197Kb) | Preview

Abstract

This paper models a contest where several sellers compete for a contract with a single buyer. There are several styles of possible designs with a subset of them preferred by the buyer. We examine what happens when the buyer communicates information about his preferences. If the sellers are unable to change their style, then there is no effect on the welfare of the sellers. If the sellers are able to make adjustments, extra information may either boost or damage the sellers' profits. While the chance that there will be a proposal of a style preferred by the buyer cannot decrease, the buyer's surplus may increase or decrease.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.