Strategic procurement, openness and market structure

Arbeitspapier

We examine strategic procurement behaviour by governments and its effect on market structure in sectors, such as defence, where the government is the dominant consumer. In a world economy with trade between producers, and between producers and non-producers, we use a modified Dixit-Stiglitz utility function with an independent taste for variety. Governments can, in effect, choose the number of domestic firms and their size by adjusting the procurement price. Unlike the standard model with no independent taste for variety and no external sector of non-producers, there are incentives for subsidies, openness impacts on industrial structure and there are potential gains from procurement coordination between producer countries.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Department of Economics Discussion Paper ; No. 05,03

Classification and Topics

• Classification: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; National Security and War ; Market Structure, Firm Strategy, and Market Performance: General
• Subject: procurement ; openness ; market structure ; defence and pharmaceutical sectors ; Öffentliche Beschaffung ; Marktstruktur ; Nutzenfunktion ; Betriebliche Preispolitik ; Unternehmenskooperation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): García-Alonso, María del Carmen ; Levine, Paul
• Event: Veröffentlichung
• (who): University of Kent, Department of Economics
• (where): Canterbury
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/68077
• Last update: 10.03.2025, 11:42 AM CET