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About the article
Published Online: 2013-05-29
Published in Print: 2013-01-01
For example, the World Bank is bound by its procurement rules to short-list six bidders, if feasible, and to publish the short-list of bidders when they are invited to make a bid.
Kaplan and Sela (2006) consider entry costs without reimbursements, assuming that entry costs are private information and find that paradoxically bidders’ equilibrium payoffs may be decreasing in their valuations. Celik and Yilankaya (2009) analyze the optimal auction when bidding is costly, assuming a private values model.
For simplicity, one may invoke that bidders do not participate in the auction if they predict that the procurer invites more than the announced number of bidders. This avoids glutted notation that would be necessary if one allowed for discrepancies between the announced size of the short-list and bidders’ prediction of it.
Of course, if m=n, upward deviations are impossible; therefore, r*(n) = 0 is trivially true.