Publications [#291799] of Giuseppe Lopomo

Journal Articles

1. Anton, JJ; Brusco, S; Lopomo, G, Split-award procurement auctions with uncertain scale economies: Theory and data, Games and Economic Behavior, vol. 69 no. 1 (May, 2010), pp. 24-41, Elsevier BV, ISSN 0899-8256 [doi]
   (last updated on 2025/04/11)

   Abstract:
   In a number of observed procurements, the buyer has employed an auction format that allows for a split-award outcome. We focus on settings where the range of uncertainty regarding scale economies is large and, depending on cost realizations, the efficient allocations include split-award outcomes as well as sole-source outcomes (one active supplier). We examine the price performance and efficiency properties of split-award auctions under asymmetric information. In equilibrium, both award outcomes can occur: the split-award outcome arises only when it minimizes total costs; sole-source outcomes, however, occur too often from an efficiency viewpoint. Equilibrium bids involve pooling at a common price for the split award, and separation for sole-source awards. We provide conditions under which the buyer and suppliers all benefit from a split-award format relative to a winner-take-all unit auction format. Model predictions are assessed with data on submitted 'step-ladder' bid prices for a U.S. defense split-award procurement. © 2009 Elsevier Inc.