Variable split awards in a single-stage procurement model

Dorothy E. Klotz, Kalyan Chatterjee

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

We show that splitting an award can result in lower expected procurement costs, even in a one-time procurement setting, as long as entering the bidding competition is costly. For sufficiently risk-averse bidders, the split award mechanism provides additional insurance against the possiblity of losing the bid and, therefore, any bidding costs. This result contrasts with previous theoretical works which focus on one-time procurement and have concluded that multiple sourcing increases expected procurement costs.

Original languageEnglish (US)
Pages (from-to)295-310
Number of pages16
JournalGroup Decision and Negotiation
Volume4
Issue number4
DOIs
StatePublished - Jul 1 1995

All Science Journal Classification (ASJC) codes

  • Decision Sciences(all)
  • Arts and Humanities (miscellaneous)
  • Social Sciences(all)
  • Strategy and Management
  • Management of Technology and Innovation

Fingerprint Dive into the research topics of 'Variable split awards in a single-stage procurement model'. Together they form a unique fingerprint.

Cite this