Delegating Procurement to Experts ∗
نویسندگان
چکیده
Buyers frequently delegate purchase decisions to sellers who are better informed about supply options and the cost of service. This paper analyzes how buyers optimally contract with sellers who vary in their expertise at prescribing service. We show that the most expert suppliers offer the greatest variation in advice. Buyers benefit from dealing with experts provided they contract sequentially whereby terms are negotiated gradually as the supplier acquires information. Chifeng Dai Department of Economcs, University of Florida, Tracy R. Lewis Fuqua School of Business, Duke University ∗We we thank seminar participants at the 2003 Summer Econometics Society Meetings and the University of Florida for their comments on an earlier version of this paper.
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