Quality Incentives in Auctions for Construction Contracts

Details

Serval ID
serval:BIB_0CFC6FE2208E
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
Quality Incentives in Auctions for Construction Contracts
Journal
International Journal of Industrial Organisation
Author(s)
Von Ungern-Sternberg T.
ISSN
0167-7187
Publication state
Published
Issued date
1994
Peer-reviewed
Oui
Volume
12
Number
1
Pages
89-104
Language
english
Abstract
Construction projects are frequently awarded on the basis of auctions. The winning project is selected not only on the basis of price, but also a variety of quality characteristics. Coming up with a high-quality project may require (substantial) up-front investments. This paper studies the relative weight the auctioneer should attach to quality when selecting the winning project. It is shown that the optimal weight may be substantially higher than his own marginal utility of quality. As a result it may be quite difficult to detect favouritism in the process of selecting the winner.
Web of science
Create date
19/11/2007 10:28
Last modification date
20/08/2019 13:34
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