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dc.contributor.authorAlbano, Gian Luigien_US
dc.contributor.authorCesi, Berardinoen_US
dc.date.accessioned2008-03-25en_US
dc.date.accessioned2010-09-29T08:56:14Z-
dc.date.available2010-09-29T08:56:14Z-
dc.date.issued2008en_US
dc.identifier.urihttp://hdl.handle.net/10419/40648-
dc.description.abstractWhen procurement contracts are awarded through competitive tendering participating firms commit ex ante to fulfil a set of contractual duties. However, selected contractors may find profitable to renege ex post on their promises by opportunistically delivering lower quality standards. In order to deter ex post moral hazard, buyers may use different strategies depending on the extent to which quality dimensions are contractible, that is, verifiable by contracting parties and by courts. We consider a stylized repeated procurement framework in which a buyer awards a contract over time to two firms with different efficiency levels. If the contractor does not deliver the agreed level of performance the buyer may handicap the same firm in future competitive tendering. We prove that under complete information extremely severe handicapping is never a credible strategy for the buyer, rather the latter finds it optimal to punish the opportunistic firm so as to make the pool of competitors more alike. In other words, when opportunistic behaviour arises, the buyer should use handicapping to "level the playing field".en_US
dc.language.isoengen_US
dc.publisherFondazione Eni Enrico Matteien_US
dc.relation.ispartofseriesNota di lavoro // Fondazione Eni Enrico Mattei: PRCG, Privatisation, regulation, corporate governance 2008,19en_US
dc.subject.jelC73en_US
dc.subject.jelD82en_US
dc.subject.jelD44en_US
dc.subject.jelH57en_US
dc.subject.jelK12en_US
dc.subject.jelL14en_US
dc.subject.ddc330en_US
dc.subject.keywordRepeated Procurementen_US
dc.subject.keywordHandicappingen_US
dc.subject.keywordRelational Contractsen_US
dc.subject.keywordStick and Carrot Strategyen_US
dc.subject.stwBeschaffungen_US
dc.subject.stwAuktionen_US
dc.subject.stwNichtpreiswettbewerben_US
dc.subject.stwVertragen_US
dc.subject.stwWiederholte Spieleen_US
dc.titlePast performance evaluation in repeated procurement: A simple model of handicappingen_US
dc.typeWorking Paperen_US
dc.identifier.ppn560329075en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:FEEM Working Papers, Fondazione Eni Enrico Mattei

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