Arbeitspapier
Auction design with fairness concerns: Subsidies vs. set-asides
Government procurement and allocation programs often use subsidies and setasides favoring small businesses and other target groups to address fairness concerns. These concerns are in addition to standard objectives such as efficiency and revenue. We study the design of the optimal mechanism for a seller concerned with efficiency, subject to a constraint to favor a target group. In our model, buyers' private values are determined by costly pre-auction investment. If the constraint is distributional, i.e. to guarantee that the target group wins sufficiently often, then the constrained efficient mechanism is a flat subsidy. This is consistent with findings in the empirical literature. In contrast, if the constraint is to ensure a certain investment level by the target group, the optimal mechanism is a type dependent subsidy. In this case a set aside may be better than a flat or percentage subsidy.
- Sprache
-
Englisch
- Erschienen in
-
Series: Discussion Paper ; No. 1548
- Klassifikation
-
Wirtschaft
Auctions
National Government Expenditures and Related Policies: Procurement
- Thema
-
auctions
subsidies
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Pai, Mallesh M.
Vohra, Rakesh
- Ereignis
-
Veröffentlichung
- (wer)
-
Northwestern University, Kellogg School of Management, Center for Mathematical Studies in Economics and Management Science
- (wo)
-
Evanston, IL
- (wann)
-
2012
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Pai, Mallesh M.
- Vohra, Rakesh
- Northwestern University, Kellogg School of Management, Center for Mathematical Studies in Economics and Management Science
Entstanden
- 2012
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