Imitation perfection : a simple rule to prevent discrimination in procurement


Mass, Helene ; Fugger, Nicolas ; Gretschko, Vitali ; Wambach, Achim


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URL: https://ub-madoc.bib.uni-mannheim.de/43753
URN: urn:nbn:de:bsz:180-madoc-437536
Document Type: Working paper
Year of publication: 2017
The title of a journal, publication series: ZEW Discussion Papers
Volume: 17-058
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
School of Law and Economics > Marktdesign (Gretschko 2017-2023)
School of Law and Economics > VWL (Wambach 2016-)
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: D44 , D73 , D82 , L13,
Keywords (English): Discrimination , symmetric auctions , procurement regulation
Abstract: Procurement regulation aimed at curbing discrimination requires equal treatment of sellers. However, Deb and Pai (2017) show that such regulation imposes virtually no restrictions on the ability to discriminate. We propose a simple rule - imitation perfection - that restricts discrimination significantly. It ensures that in every equilibrium bidders with the same value distribution and the same valuation earn the same expected surplus. If all bidders are homogeneous, revenue and social surplus optimal auctions which are consistent with imitation perfection exist. For heterogeneous bidders however, it is incompatible with revenue and social surplus optimization. Thus, a trade-off between non-discrimination and optimality exists.




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