Third-Party Opportunism and the (In)Efficiency of Public Contracts
CALIFORNIA UNIV BERKELEY HAAS SCHOOL OF BUSINESS
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The lack of exibility in public procurement design and implementation reflects public agents political risk adaptation to limit hazards from opportunistic third parties--political opponents, competitors, interest groups--while externalizing the associated adaptation costs to the public at large. Reduced exibility limits the likelihood of opportunistic challenge lowering third parties expected gains and increasing litigation costs. We provide a comprehensible theoretical framework with empirically testable predictions.
- Administration and Management
- Government and Political Science
- Logistics, Military Facilities and Supplies