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on Contract Theory and Applications |
| By: | Leandro Arozamena; Federico Weinschelbaum; Juan-José Ganuza |
| Abstract: | A sponsor –e.g. a government agency– uses a procurement auction to select a supplier who will be in charge of the execution of a contract. That contract is incomplete: it may be renegotiated once the auction's winner has been chosen. We examine a setting where one firm may bribe the agent in charge of monitoring contract execution so that the former is treated preferentially if renegotiation actually occurs. If a bribe is accepted, the corrupt firm will be more aggressive at the initial auction and thus win with a larger probability. We show that the equilibrium probability of corruption is larger when the initial contract is less complete, when the corrupt firm's cost is more likely to be similar to her rivals', and when it faces fewer competitors. |
| Keywords: | auctions, Procurement, corruption, renegotiation, cost overruns |
| JEL: | C72 D44 D82 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1492 |
| By: | Hohendanner, Christian (Institute for Employment Research (IAB), Nuremberg, Germany); Latner, Jonathan P. (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "Compared to permanent employment contracts, fixed-term contracts are less attractive. However, a recent IAB study shows that fixed-term contracts are not necessarily disadvantageous, even if permanent contracts are preferable from the employees’ point of view. The decisive factors are less related to the contract type and more related to an individual’s career and professional development. Particularly in economically uncertain times, it is worth taking another look at the various forms of employment. Neither the transition from fixed-term to permanent employment nor vice versa leads to wage reductions. In addition, both types of contracts offer the unemployed similar opportunities for integration." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | IAB-Open-Access-Publikation ; IAB-Betriebspanel |
| Date: | 2025–07–17 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabkbe:202513(en) |