经济代写|微观经济学代写Microeconomics代考|Information Bias

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经济代写|微观经济学代写Microeconomics代考|Information Bias

In many cases, private owners use their complete information of all unit prices from all different bidders to further negotiate the price downward. Theoretically we face a turnaround of the typical principal/agent relationship. In construction contracts, the owner acting as principal appoints the contractor as an agent to implement the project on his behalf. During the implementation the contractor (agent) gains a lot of information that is not available to the owner. This establishes an information asymmetry favoring the contractor. In many cases, contractors will use this asymmetry for their gain. This happens after signing the contract when the two parties have entered into a two-sided monopoly. Before signing the contract, however, the situation is reversed. The contractors as principals endow the owners as agents with the task to agree on a contract. They have no influence on the decision-making process once they have submitted their bids. Information asymmetry favors the owner. The actions of owners as free agent mean that there are no restraints on their behavior and the principal (each single contractor) cannot watch the actions. This allows clients to take hidden actions and to exploit a moral hazard situation. The latter situation arises when agents face no risks for acting in their own self-interest.

The asymmetric information, the moral hazard situation, and the possibilities for hidden action allow owners to play one bidder against the next. False information about the price of one bidder given to another one cannot be detected by either bidder during a round of simultaneous negotiations. Only at the end of the negotiation do the bidders exchange and check the owner’s information. This is a legal strategy. Certainly, however, it will be seen as unfair by the contractors. It is also seen as unfair in many countries by legislation. In Germany, for example, public owners are not allowed to reduce the price during negotiations, thus making it impossible to use the asymmetric information advantage. However, private owners are free to negotiate the contract price. Making use of false information is often not even perceived as an ethical problem but as shrewd negotiation tactics.

The above paragraph describes the outcome of the monopsony situation on the project level. Yet the consequences of enacting a monopsony are as detrimental to the overall welfare on the national market level as is true for monopolies. Monopsonies are seen as the opposite of monopolies in textbooks.

Figure 15.13 explains the process of reaching the final contract price to be paid by the owner. The submitted price of the low bid is below market equilibrium price. Then, the owner engages in price negotiations. The assumption in the figure is that the original low bidder remains the low bidder after negotiations. This is not necessarily the outcome in a specific case. It can also be that the low bidder is undercut during negotiations by another bidder.

经济代写|微观经济学代写Microeconomics代考|Supply and Demand in Construction

Initial perfect competition in construction markets combined with sealed-bid auctions and followed by a monopsony situation with an asymmetric information advantage assures the market power of the owner. The contractor is confronted with four factors: (i) Sealed-bid auctions as institutions are rewarding estimating errors, driving the lowbid award price below equilibrium price. (ii) Sealed-bid auctions as institutions provide asymmetric information, driving the low-bid award price below equilibrium price. This holds especially true in a two-phase award process, when the auction is followed by price negotiations. (iii) Sealed-bid auctions as institutions further uncertainty, resulting in overly optimistic assumptions and driving the low-bid award price below equilibrium price. (iv) Sealed-bid auctions as institutions exploit technological advances by firms, driving the low-bid award price below equilibrium price. All effects will overlap and aggregate. In the worst case, the technologically most advanced contractor commits the biggest estimating error by using overoptimistic assumptions, and is being taken advantage of during a negotiation phase.

Accordingly, contractors feel continuously pressed into an unfair pricing system in comparison to competitive market structures. Their only chance to counter the asymmetric information advantage of the owner is through collusive cooperation. In terms of game theory, it can be stated that the payoffs for a noncollusive outcome of a sealed-bid auction are negative in comparison with the equilibrium price that is accepted as being fair. The incentives in the auction game are not set in a way to keep the contractors interested in keeping the rules. Anti-trust laws are required to keep them in line. However, these are not always successful.

微观经济学代考

经济代写|微观经济学代写Microeconomics代考|Information Bias

在许多情况下,私人业主利用他们从所有不同投标人那里获得的所有单价的完整信息来进一步压低价格。从理论上讲,我们面临着典型委托人/代理人关系的转变。在建筑合同中,作为委托人的业主指定承包商作为代理人,代表他实施工程。在实施过程中,承包商(代理人)获得了许多业主无法获得的信息。这建立了有利于承包商的信息不对称。在许多情况下,承包商会利用这种不对称性谋取利益。当双方进入双边垄断时,这种情况发生在签订合同之后。然而,在签订合同之前,情况发生了逆转。作为委托人的承包商赋予作为代理人的业主达成合同的任务。一旦他们提交了投标,他们就无法影响决策过程。信息不对称有利于所有者。业主作为自由代理人的行为意味着他们的行为不受限制,委托人(每个单独的承包商)无法观看这些行为。这允许客户采取隐藏的行动并利用道德风险情况。后一种情况出现在代理人不面临为自身利益行事的风险时。这允许客户采取隐藏的行动并利用道德风险情况。后一种情况出现在代理人不面临为自身利益行事的风险时。这允许客户采取隐藏的行动并利用道德风险情况。后一种情况出现在代理人不面临为自身利益行事的风险时。

不对称信息、道德风险情况以及隐藏行动的可能性使所有者可以与下一个投标人竞争。在一轮同时进行的谈判中,任何一个投标人都无法检测到有关一个投标人提供给另一个投标人的价格的虚假信息。只有在谈判结束时,投标人才会交换和核对业主的信息。这是一种合法的策略。但是,肯定会被承包商视为不公平。这在许多国家的立法中也被视为不公平。例如在德国,公有业主在谈判中不允许降低价格,因此无法利用信息不对称的优势。但是,私人业主可以自由协商合同价格。

上段描述了项目层面垄断情况的结果。然而,实施垄断的后果与垄断一样不利于国家市场层面的整体福利。垄断在教科书中被视为垄断的对立面。

图 15.13 解释了最终合同价格由业主支付的过程。低价投标的提交价格低于市场均衡价格。然后,业主进行价格谈判。图中的假设是原来的低价者在谈判后仍然是低价者。这不一定是特定情况下的结果。也可能是低价投标人在谈判期间被另一投标人削弱。

经济代写|微观经济学代写Microeconomics代考|Supply and Demand in Construction

建筑市场最初的完全竞争与密封投标拍卖相结合,随后是具有不对称信息优势的垄断局面,确保了业主的市场力量。承包商面临四个因素:(i) 密封投标拍卖,因为机构奖励估计错误,导致低标中标价格低于均衡价格。(ii) 密封投标拍卖作为机构提供的信息不对称,导致低价中标价格低于均衡价格。在拍卖之后进行价格谈判的两阶段授予过程中尤其如此。(iii) 密封投标拍卖作为机构进一步的不确定性,导致过度乐观的假设并推动低标中标价格低于均衡价格。(iv) 密封投标拍卖作为机构利用公司的技术进步,将低价中标价格推至低于均衡价格。所有效果都会重叠和聚合。在最坏的情况下,技术最先进的承包商会因使用过于乐观的假设而犯下最大的估计错误,并在谈判阶段被利用。

因此,与竞争性市场结构相比,承包商感到不断被迫进入不公平的定价体系。他们对抗所有者的不对称信息优势的唯一机会是通过串通合作。根据博弈论,可以说密封投标拍卖的非共谋结果的收益与被接受为公平的均衡价格相比是负的。拍卖游戏中的激励措施并不是为了让承包商有兴趣遵守规则。需要反托拉斯法来使它们保持一致。然而,这些并不总是成功的。

经济代写|微观经济学代写Microeconomics代考

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