{"id":7054,"date":"2023-12-05T19:48:05","date_gmt":"2023-12-05T19:48:05","guid":{"rendered":"https:\/\/aaep.org.ar\/?p=7054"},"modified":"2023-12-05T19:48:07","modified_gmt":"2023-12-05T19:48:07","slug":"renegotiation-corruption-and-cost-overruns-in-procurement","status":"publish","type":"post","link":"https:\/\/aaep.org.ar\/?p=7054","title":{"rendered":"Renegotiation, Corruption and Cost Overruns in Procurement"},"content":{"rendered":"<iframe loading=\"lazy\" class=\"wonderplugin-pdf-iframe\" src=\"https:\/\/aaep.org.ar\/wp-content\/plugins\/wonderplugin-pdf-embed\/pdfjslight\/web\/viewer.html?v=2&file=https:\/\/aaep.org.ar\/works\/works2023\/3.pdf\" width=\"100%\" height=\"600px\" style=\"border:0;\"><\/iframe>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>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&#8217;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, and when the corrupt firm&#8217;s cost is more likely to be similar to her rivals&#8217;. In addition, we examine how this influences the sponsor&#8217;s incentives when designing the initial contract.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","footnotes":""},"categories":[29],"tags":[31],"class_list":["post-7054","post","type-post","status-publish","format-standard","hentry","category-anales","tag-aaep-anales-2023"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Renegotiation, Corruption and Cost Overruns in Procurement - Asociaci\u00f3n Argentina de Econom\u00eda Pol\u00edtica<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"es_ES\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Renegotiation, Corruption and Cost Overruns in Procurement - Asociaci\u00f3n Argentina de Econom\u00eda Pol\u00edtica\" \/>\n<meta property=\"og:description\" content=\"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&#039;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, and when the corrupt firm&#039;s cost is more likely to be similar to her rivals&#039;. In addition, we examine how this influences the sponsor&#039;s incentives when designing the initial contract.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/aaep.org.ar\/?p=7054\" \/>\n<meta property=\"og:site_name\" content=\"Asociaci\u00f3n Argentina de Econom\u00eda Pol\u00edtica\" \/>\n<meta property=\"article:published_time\" content=\"2023-12-05T19:48:05+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-12-05T19:48:07+00:00\" \/>\n<meta name=\"author\" content=\"aaepolitica\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@aaepoficial\" \/>\n<meta name=\"twitter:site\" content=\"@aaepoficial\" \/>\n<meta name=\"twitter:label1\" content=\"Escrito por\" \/>\n\t<meta name=\"twitter:data1\" content=\"aaepolitica\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/aaep.org.ar\\\/?p=7054#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/aaep.org.ar\\\/?p=7054\"},\"author\":{\"name\":\"aaepolitica\",\"@id\":\"https:\\\/\\\/aaep.org.ar\\\/#\\\/schema\\\/person\\\/7150b747ba20875259c74b2cd177316c\"},\"headline\":\"Renegotiation, Corruption and Cost Overruns in Procurement\",\"datePublished\":\"2023-12-05T19:48:05+00:00\",\"dateModified\":\"2023-12-05T19:48:07+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/aaep.org.ar\\\/?p=7054\"},\"wordCount\":22,\"publisher\":{\"@id\":\"https:\\\/\\\/aaep.org.ar\\\/#organization\"},\"keywords\":[\"AAEP Anales 2023\"],\"articleSection\":[\"Anales\"],\"inLanguage\":\"es\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/aaep.org.ar\\\/?p=7054\",\"url\":\"https:\\\/\\\/aaep.org.ar\\\/?p=7054\",\"name\":\"Renegotiation, Corruption and Cost Overruns in Procurement - 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