Second sourcing and the experience curve: price competition in defense procurement

摘要: We examine a dynamic model ofprice competition in defense procurement that incorporates the experience curve, asymmetric cost information, and availability of higher alternative system. acquisition as two-stage process which initial production is governed by contract between government developer. Competition then introduced an auction second source bids against developer for remaining production. characterize class contracts are minimizing induce to reveal private information. When high costs revealed, these result credible cutoff new system favor still