2006 Fiscal Year Final Research Report Summary
Economic Analysis of Public Procurement by Contract Theory
| Project/Area Number |
17530145
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Economic theory
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| Research Institution | KYUSHU UNIVERSITY |
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Principal Investigator |
MIURA Isao Kyushu University, Faculty of Economics, Professor, 大学院経済学研究院, 教授 (30239173)
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| Project Period (FY) |
2005 – 2006
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| Keywords | Multi-divisional Auction / PFI / Incomplete Contract Theory / Bid Rigging / Repeated Game |
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| Research Abstract |
The purpose of this study is to examine the feature of Public Procurement, especially PFI and Total Evaluation Winner Mechanism, applying contract theory. Firstly, I considered the case that there was uncertainty about PFI project and we couldn't verify the action of PFI firm. And I examined how does the possibility of reconstruction for itself effect on PFI project when the project become bankruptcy in the framework of incomplete contract theory. As the result, I showed that the firm select a lower effort level under the perfect equilibrium than otherwise and also showed what sort of condition was needed to reconstruction for itself bring socially optimal outcome.
Second, I studied the total evaluation winner mechanism. Specially I focused the mechanism that estimate by sum of the quality and cost about PFI project. Then I assumed that the bidder with high quality and high cost has higher score than the one with low quality and low cost. Then I could attain two interesting results : (1
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) while efficient firm bids low price and inefficient firm does high price in symmetric equilibrium irrespective of his technical level in the case that each bidder cannot control his technical level, more inefficient bidder become, higher is possibility that he select lower quality in symmetric equilibrium in the case that the bidder who has high technical level can select low quality and he can save PFI cost by doing it, (2) however I showed that such a inefficient situation was able to improve to a certain degree by making procurer use technical reward system to maintain the quality level.
Moreover I examined deregulation, competition polity and repeated game as complementation of above mentioned work. The former was that I surveyed the present condition of Japan about the deregulation and considered competition polity by anti-monopolistic law and specially analyzed "HUTOU NA TORIHIKI SEIGEN NO KINSI" as a viewpoint of economics. The later was that I considered infinite-horizon repeated game and surveyed the Folk-theorem both the case of perfect monitoring and imperfect (public) monitoring. Less
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