Right-of-First-Refusal when Rival's type is unobservable
Right-of-first-refusal (ROFR) is used extensively in auctions. This right permits the favored bidder to win an auction against an unfavored bidder by matching her bid. Different clauses of ROFR exist. We denote A-ROFR when the favored bidder can revise his bid downwards and B-ROFR when he cannot. We investigate the effect of these clauses on bidding strategies in a first-price auction with two bidders when the rival's type is unobservable. We highlight three effects which differ from one clause to another and compare the effects on the allocation and on the expected payoff of each agent. probability that a seller's revenue with the two clauses.
This paper was presented at the European Association for Research in Industrial Economics (EARIE) 2021.
Small firm policies in procurement: New evidence from drug procurement auctions in Brazil with Eduardo Fiuza (Institute for Applied Economic Research, Brazil), Ulrich Laitenberger (Telecom Paris) and Christine Zulehner (University of Vienna/Telecom Paris)
Small firm policies are used extensively in government procurement. Buyers make use of preference margin or set aside policies. Prior research found that restricting entry to small businesses can reduce efficiency and revenue substantially while increasing firm participation. A different policy suggests that small firms should have the right to undercut the prospected winner after the auction, conditional on that they have not been bidding too weak during the auction. In this context, we analyse this policy using Brazilian e-auctions for pharmaceutical drugs, where either the right to undercut or set-asides have been extensively used for many years. We compare both policies regarding their effect on the participation decisions of firms, their bidding behaviour, and the final price.
This paper was presented at the Association Française de Recherche en Economie Numérique (AFREN ) 2019, Association pour le Développement de la Recherche en Économie et en Statistique (ADRES) 2022.
Upstream mergers and downstream timing of technology adoption with Marie-Laure Allain (CREST, CNRS)
In this paper, we show that a merger which could be accepted by the competition authority because of the absence of short-term effects, should be rejected because of the presence of long-term effects.
We consider the effect of a merger of two firms which supply a downstream industry. We show that, even when contracts are secret, the merger can affect the downstream sector and limit the long terms incentives to innovate. Although the equilibrium outcome in the final market is not affected by the merger, because the variable wholesale tariff is unchanged, the sharing of profits between the upstream and the downstream sectors is modified in favour of the supplier and this reduces the long term incentives of the downstream firms to adopt a new technology. As a consequence the merger always delays the technology adoption by the two downstream firms but reduces the lag between the adoptions.
This paper was presented at CREST (2018), Telecom Paris (2018), AFREN (2018), EARIE (2018), European Economic Association (EEA) 2019.
Domestic production policies in procurement: competing auctions and technology choice - work in progress