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Abstract
We study how a buyer unable to price discriminate should satisfy his demand in
the presence of diseconomies of scale in production. Defying the Coase Conjecture,
we show that auctioning contracts for lots (block sourcing) followed by setting a
price to realize (part of) the residual gains from trade always leads to higher buyer
surplus than simply setting a price.
the presence of diseconomies of scale in production. Defying the Coase Conjecture,
we show that auctioning contracts for lots (block sourcing) followed by setting a
price to realize (part of) the residual gains from trade always leads to higher buyer
surplus than simply setting a price.
Original language | English |
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Publisher | Edinburgh School of Economics Discussion Paper Series |
Number of pages | 21 |
Volume | 291 |
Publication status | Published - 11 Jun 2019 |
Keywords / Materials (for Non-textual outputs)
- block sourcing
- lot auction
- monopoly
- procurement
- residual market
- split awards
- D42
- D44
- L12
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Dive into the research topics of 'Beating Coase at Monopoly'. Together they form a unique fingerprint.Projects
- 1 Finished
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Transparency in Procurement: The design and use of information in trading mechanisms.
Sakovics, J. & Visschers, L.
1/01/16 → 31/12/18
Project: Research