Chandel, Shivangi and Sarkar, Shubhro (2023) Corruption in multidimensional procurement auctions under asymmetry. Economic Modelling, 120: 106187. ISSN 1873-6122
Corruption in multidimensional procurement auctions under asymmetry.pdf - Published Version
Restricted to Registered users only
Download (673kB) | Request a copy
Abstract
We examine corruption in first and second-score procurement auctions with two asymmetric bidders. We assume that an agent, who is known to be corrupt with some exogenously known probability, asks for a bribe from one of two bidders and promises to manipulate bids in return. Using a symmetric quasi-linear scoring rule, we show that the agent approaches the weaker bidder for a bribe for higher levels of bidder asymmetry in both auction formats. Our numerical simulations suggest that the procurer prefers the first-score auction when the agent colludes with the stronger bidder in the second-score auction. If the weaker bidder is favored, on the other hand, the buyer switches to the second-score auction when the probability of corruption is high. This is due to the agent’s limited ability to manipulate bids in favor of the weaker bidder in the second-score auction. Finally, neither auction mechanism is efficient in the presence of corruption.
Item Type: | Article |
---|---|
Keywords: | Auctions | Asymmetric Bidders | Corruption | Multidimensional Procurement |
Subjects: | Social Sciences and humanities > Social Sciences > Social Sciences (General) |
JGU School/Centre: | Jindal School of Government and Public Policy |
Depositing User: | Amees Mohammad |
Date Deposited: | 08 Jan 2023 09:35 |
Last Modified: | 23 Feb 2023 05:30 |
Official URL: | https://doi.org/10.1016/j.econmod.2022.106187 |
URI: | https://pure.jgu.edu.in/id/eprint/5340 |
Downloads
Downloads per month over past year