The dynamics of bidding markets with financial constraints
نویسندگان
چکیده
منابع مشابه
Bidding Markets with Financial Constraints∗
We develop a model of bidding markets with financial constraints a la Che and Gale (1998b) in which two firms optimally choose their budgets. First, we provide an alternative explanation for the dispersion of markups and “money left on the table” across procurement auctions. Interestingly, this explanation does not hinge on significant private information but on differences, both endogenous and...
متن کاملThe dynamics of bidding markets with financial constraints
We develop a model of bidding markets with financial constraints à la Che and Gale (1998b) in which two firms choose their budgets optimally and we extend it to a dynamic setting over an infinite horizon. We provide three main results for the case in which the exogenous cash-flow is not too large and the opportunity cost of budgets is positive but arbitrarily low. First, firms keep small budget...
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ژورنال
عنوان ژورنال: Journal of Economic Theory
سال: 2015
ISSN: 0022-0531
DOI: 10.1016/j.jet.2014.11.013