Sequential Procurement Auction Model

We analyze \u85rst-price equilibrium bidding behavior of capacity-constrained \u85rms in a sequence of two procurement auctions. In the model, \u85 rms with a cost advantage in com-pleting the project auctioned o ¤ at the end of the sequence may enter the unfavored \u85rst auction hoping to lose it. Equilibrium bidding in both auctions deviates from the standard Symmetric Independent Private Value auction model (SIPV) due to opportunity costs of bidding created by possibly employed capacity. For this sequential auction model with non-identical objects, we show that revenue equiv-alence holds