There is widespread concern that incentive mechanisms based on past performance may hinder entry in procurement markets. We report results from a laboratory experiment assessing this concern. Within a simple dynamic procurement game where suppliers compete on price and quality we study how an incentive mechanism based on past performance affects outcomes and entry rates. Results indicate that some past-performance based mechanisms indeed hinder entry, but when appropriately designed may significantly increase both entry and quality provision without increasing costs to the procurer.
Past performance and entry in procurement: An experimental investigation
CONZO, Pierluigi;
2020-01-01
Abstract
There is widespread concern that incentive mechanisms based on past performance may hinder entry in procurement markets. We report results from a laboratory experiment assessing this concern. Within a simple dynamic procurement game where suppliers compete on price and quality we study how an incentive mechanism based on past performance affects outcomes and entry rates. Results indicate that some past-performance based mechanisms indeed hinder entry, but when appropriately designed may significantly increase both entry and quality provision without increasing costs to the procurer.File in questo prodotto:
File | Dimensione | Formato | |
---|---|---|---|
Reputation and Entry.pdf
Accesso aperto
Tipo di file:
POSTPRINT (VERSIONE FINALE DELL’AUTORE)
Dimensione
2.23 MB
Formato
Adobe PDF
|
2.23 MB | Adobe PDF | Visualizza/Apri |
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.