An Investigation of the Average Bid Mechanism in Procurement Auctions

Wei Shiun Chang (Pre-doc, Economics), and Timothy Salmon, (Professor/Advisor, Economics) Florida State University)

This project investigates a bid mechanism in which buyers purchase from the seller who comes closest to the average price of the submitted bids. The first part of this work is theoretical development. The second part is experimental work. In the first part, the researchers will analyze the mechanism under different assumptions (seller costs and quality). The second part will test the predictions derived from this analysis in the lab.