Competitive Bidding and the Production of Precontract Information
Volume: Volume 8, No. 1
Issue: Spring 1977
Pages: pp. 250-261
Authors: Victor P. Goldberg
Title: Competitive Bidding and the Production of Precontract Information
Abstract: This note is concerned with the effects of contractual complexity on the precontract bidding process. Competitive bidding is seen to be a heterogeneous class of devices for transmitting information between organizations. Even for rather simple contracts (e.g., Demsetz' license plates contract), the purchaser is seldom interested solely in price -- he is interested in acquiring and providing information as well. For complex contracts, such as a fifteen-year cable television franchise, the information problems tend to dominate. The implications of locating the liability for provision of precontract information on providers and on purchasers are considered.
JEL Classification
Microeconomics Theory of Firm and Industry under Competitive Market Structures (0225)
Economics of Uncertainty and
Information Game Theory and Bargaining Theory: General (0260)