Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5100938 | Journal of International Economics | 2017 | 9 Pages |
Abstract
Discrimination against foreign bidders in procurement auctions has typically been achieved by price preferences. We demonstrate that in the bidding game, each level of protection via a price preference can be achieved by an equivalent tariff. When government welfare depends only on net expenditures, this equivalence carries over to the government's decision. As such, this equivalence provides a justification that agreements to eliminate price preferences to be taken in tandem with agreements to lower tariffs; e.g., the Government Procurement Agreement (GPA) in the broader context of the WTO.
Related Topics
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Economics and Econometrics
Authors
Matthew T. Cole, Ronald B. Davies, Todd Kaplan,