| Abstract: | Governments continue to embrace the market‐like mechanisms of auctions and bidding. This essay considers how governments (as bid‐takers) and firms and nonprofits (as bidders) strategically interact in the design and implementation of these systems. I assess with regard to the uniqueness of bidding in government four principles on the role of: credible commitments, rational collusion, the setting of reserve prices, and heterogeneity among bidders. I also address recent calls for expanding the use of dynamic pricing in government. |
