讲座题目：Procurement in welfare programs: Evidence and implications from WIC infant formula contracts

主讲人：安永红（德克萨斯农工大学 教授）

时间：2024年5月24日（周五）10:30-11:30

地点：经管学院院楼116会议室

内容简介：

This paper examines the impact of government procurement in social welfare programs on consumers, manufacturers, and the government. We analyze the U.S. infant formula market, where over half of the total sales are purchased by the Women, Infants, and Children (WIC) program. The WIC program utilizes first-price auctions to solicit rebates from the three main formula manufacturers, with the winner exclusively serving all WIC consumers in the winning state. The manufacturers compete aggressively in providing rebates which account for around 85% of the wholesale price. To rationalize and disentangle the factors contributing to this phenomenon, we model manufacturers' retail pricing competition by incorporating two unique features: price inelastic WIC consumers and government regulation on WIC brand prices. Our findings confirm three sizable benefits from winning the auction: a notable spill-over effect on non-WIC demand, a significant marginal cost reduction, and a higher retail price for the WIC brand due to the price inelasticity of WIC consumers. Our counterfactual analysis shows that procurement auctions affect manufacturers asymmetrically, with the smallest manufacturer harmed the most. More importantly, by switching from the current mechanism to a predetermined rebate procurement, the government can still contain the cost successfully, consumers' surplus is greatly improved, and the smallest manufacturer benefits from the switch, promoting market competition.

主讲人介绍：

安永红，现任德克萨斯农工大学（Texas A&M University）教授，《International Studies of Economics》执行主编；获约翰霍普金斯大学经济学博士学位、清华大学物理系硕士学位以及哈尔滨工业大学工学学士学位。主要研究方向为微观计量以及实证产业组织经济学，研究成果发表于 Journal of Econometrics, The Rand Journal of Economics, Journal of Business & Economic Statistics, Journal Economic Behavior & Organization 等顶级学术期刊。