← Search

Coordination in Split Award Auctions

J. J. Anton^1,2; Dennis A. Yao³

¹ Duke University · ² Stony Brook University · ³ California University of Pennsylvania

We analyze split award procurement auctions in which a buyer divides full production between two suppliers or awards all production to a single supplier, and suppliers have private cost information. An intriguing feature of split awards is that the equilibrium bids are implicitly coordinated. Because a split award price is the sum of offered split prices, each supplier can unilaterally veto a split award by bidding very high for the split. The need to coordinate is reflected in a split price that does not vary with private information. We also explore conditions under which split award auctions may be preferred to winner-take-all auctions.

DOI

10.2307/2118486

Volume

107 (2)

Pages

681-707

Language

en

Export

BibTeX

Sources

openalex crossref