Oxford Events, the new replacement for OxTalks, will launch on 16th March. From now until the launch of Oxford Events, new events cannot be published or edited on OxTalks while all existing records are migrated to the new platform. The existing OxTalks site will remain available to view during this period.
From 16th, Oxford Events will launch on a new website: events.ox.ac.uk, and event submissions will resume. You will need a Halo login to submit events. Full details are available on the Staff Gateway.
Sign up for meetings on the sheet below:
docs.google.com/spreadsheets/d/13ovx0deRg8mA3h5XVO95SLGQcZQMTAcbZiTKaGFTKvs/edit#gid=0
If signing up less than two days before the talk, please also email facultyadmin@economics.ox.ac.uk
Abstract:
The procurement of complex projects is often plagued by large cost overruns. One important reason for these additional costs are flaws in the initial design. If the project is procured with a price-only auction, sellers who spotted some of the flaws have no incentive to reveal them early. Each seller prefers to conceal his information until he is awarded the contract and then renegotiate when he is in a bilateral monopoly position with the buyer. We show that this gives rise to three inefficiencies: inefficient renegotiation, inefficient production and inefficient design. We derive the welfare optimal direct mechanism that implements the efficient allocation at the lowest possible cost to the buyer. The direct mechanism, however, imposes strong assumptions on the buyer’s prior knowledge of possible flaws and their payoff consequences. Therefore, we also propose an indirect mechanism that implements the same allocation but does not require any such prior knowledge. The optimal direct and indirect mechanisms separate the improvement of the design and the selection of the seller who produces the good.
