The Frontiers of Society, Science and Technology, 2019, 1(8); doi: 10.25236/FSST.2019.010820.
Huazhong Agricultural University, China
It is possible, in many purchase settings that a buyer can split a production award between suppliers. In this paper, I tried to introduce a split-award auction model with endogenous split choice. Then I discussed the equilibrium outcome of this model. By analyzing the properties of the equilibria and comparing the equilibria with a sole-source outcome, I arrived at the conclusions showing that the buyer would prefer a split-award auction to a winner-take-all auction because of the efficiency that a split-award auction can offer.
Split-award auction; Model
Zeyu Zhang. Simple Analysis of Split Award Auctions. The Frontiers of Society, Science and Technology (2019) Vol. 1 Issue 8: 125-131. https://doi.org/10.25236/FSST.2019.010820.
 Anton J James, Yao DA (1987). Second Sourcing and the Experience Curve: Price Competition in Defense Procurement, The RAND Journal of Economics. The RAND Corporation, vol.18, no.1, pp.57-76.
 Anton J James, Yao D A (1989). Split-Awards, Procurement, and Innovation. The RAND Journal of Economics, vol.20, no.4, pp.538-552.
 Anton J James, Yao D A (1989). Coordination in Split Award Auctions. The Quarterly Journal of Economics, vol.107, no.2, pp.681-707.
 Bernheim B D, Whinston M D (1986).Menu Auctions, Resource Allocation, and Economic Influence. Quarterly Journal of Economics, vol.101, pp.1-31.
 Carbajal Juan Carlos, Ely Jeffrey C (2010). Mechanism Design Without Revenue Equivalence.
 Ely Jeffrey. C (2001). Revenue Equivalence Without Differentiability Assumptions.
 Jehiel Philippe, Moldovanu Benny (2001). Revenue Maximization and Efficiency in Multi-object Auctions.
 Klemperer Paul (1999). Auction Theory: A Guide to the Literature. Journal of Economic Surveys, vol.13, no.3, pp.227-286.
 Mathewson G.F, Winter R A (1987). The Competitive Effects of Vertical Agreements: Comment. American Economics Review, vol. 77, pp. 1057-1062.
 Rob R (1986).The Design of Procurement Contracts. American Economic Review, vol. 76, pp. 378-389.