Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/59631 
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dc.contributor.authorPai, Mallesh M.en
dc.contributor.authorVohra, Rakeshen
dc.date.accessioned2012-05-15-
dc.date.accessioned2012-07-12T12:33:39Z-
dc.date.available2012-07-12T12:33:39Z-
dc.date.issued2012-
dc.identifier.urihttp://hdl.handle.net/10419/59631-
dc.description.abstractGovernment procurement and allocation programs often use subsidies and setasides favoring small businesses and other target groups to address fairness concerns. These concerns are in addition to standard objectives such as efficiency and revenue. We study the design of the optimal mechanism for a seller concerned with efficiency, subject to a constraint to favor a target group. In our model, buyers' private values are determined by costly pre-auction investment. If the constraint is distributional, i.e. to guarantee that the target group wins sufficiently often, then the constrained efficient mechanism is a flat subsidy. This is consistent with findings in the empirical literature. In contrast, if the constraint is to ensure a certain investment level by the target group, the optimal mechanism is a type dependent subsidy. In this case a set aside may be better than a flat or percentage subsidy.en
dc.language.isoengen
dc.publisher|aNorthwestern University, Kellogg School of Management, Center for Mathematical Studies in Economics and Management Science |cEvanston, ILen
dc.relation.ispartofseries|aDiscussion Paper |x1548en
dc.subject.jelD44en
dc.subject.jelH57en
dc.subject.ddc330en
dc.subject.keywordauctionsen
dc.subject.keywordsubsidiesen
dc.titleAuction design with fairness concerns: Subsidies vs. set-asides-
dc.typeWorking Paperen
dc.identifier.ppn715699156en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen
dc.identifier.repecRePEc:nwu:cmsems:1548en

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