Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/129590 
Year of Publication: 
2015
Series/Report no.: 
Working Paper Series No. 15-08
Publisher: 
University of Mannheim, Department of Economics, Mannheim
Abstract: 
I investigate firms' competition over price and product design under uncertain design evaluations in the context of Design-Build (DB) auctions. Reviewers' design evaluations contain uncertainty from a bidder's perspective, leading luck to curtail differences in firms' chances of winning. I model bidders' behavior and derive semiparametric identification of the model primitives. Uncertain evaluations worsen the expected price of design quality, and exacerbate an auctioneer's uncertainty in auction outcomes. A simple adjustment in the auction mechanism may completely shut down the impact of uncertain evaluations on bidding incentives, restoring efficient allocations of projects.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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