Strategic Ignorance in Sequential Procurement Academic Article

abstract

• Should a buyer approach sellers of complementary goods informed or uninformed of her private valuations, and if informed, in which sequence? In this paper, we show that an informed buyer would start with the high-value seller to minimize future holdup. Informed (or careful) sequencing may, however, hurt the buyer as sellers read into it. The buyer may, therefore, commit to ignorance, perhaps, by overloading herself with unrelated tasks, delegating the sequencing decision, or letting sellers self-schedule. Absent such commitment, we show that ignorance is not time-consistent for the buyer, but it increases trade. Evidence on land assembly supports our findings. (JEL D11, D81, D82, D83)

authors

• Krasteva, Silvana

published proceedings

• AMERICAN ECONOMIC JOURNAL-MICROECONOMICS

author list (cited authors)

• Krasteva, S., & Yildirim, H.

citation count

• 5

complete list of authors

• Krasteva, Silvana||Yildirim, Huseyin

publication date

• May 2019

publisher

• American Economic Association  Publisher

published in

• American Economic Journal: Microeconomics  Journal

keywords

• 38 Economics
• 3801 Applied Economics
• 3803 Economic Theory

Digital Object Identifier (DOI)

• 10.1257/mic.20170076

start page

• 131

end page

• 172

volume

• 11

issue

• 2

URL

• http://dx.doi.org/10.1257/mic.20170076