The Impact of Scoring Weights on Price and Quality Outcomes: An Application to the Procurement of Welfare-to-Work Contracts
AbstractThis paper assesses the effects of changes in scoring weights in auctions, using a unique sample of biddings of private Welfare-to-Work (WTW) organizations to reintegrate groups of unemployed and disabled workers. WTW-organizations did not only bid on prices, but also received points for three proxies of the quality of their services: their reputation, a description of their intended methodology to reintegrate workers and the fraction of job placements they considered likely to achieve. We exploit the fact that the scoring weights of these items changed in the time period under consideration, while the broad classification of ('gross') worker types remained similar over time. Our estimation results show that increases in the scoring weights of the quality items result in higher price bids, particularly of WTW-firms that are bidding for the first time as entrants. For the WTW-firms that won the procurements, we find a higher weight for both the reputation and the methodology item to contribute to the job placement of workers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 13-066/V.
Date of creation: 14 May 2013
Date of revision:
Contact details of provider:
Web page: http://www.tinbergen.nl
Scoring auctions; welfare-to-work.;
Other versions of this item:
- Koning, Pierre & van de Meerendonk, Arthur, 2012. "The Impact of Scoring Weights on Price and Quality Outcomes: An Application to the Procurement of Welfare-to-Work Contracts," IZA Discussion Papers 7116, Institute for the Study of Labor (IZA).
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-05-24 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Onderstal, Sander, 2009. "Bidding for the unemployed: An application of mechanism design to welfare-to-work programs," European Economic Review, Elsevier, vol. 53(6), pages 715-722, August.
- James J. Heckman & Carolyn Heinrich & Jeffrey Smith, 2002.
"The Performance of Performance Standards,"
Journal of Human Resources,
University of Wisconsin Press, vol. 37(4), pages 778-811.
- Heckman, James J. & Heinrich, Carolyn J. & Smith, Jeffrey A., 2002. "The Performance of Performance Standards," IZA Discussion Papers 525, Institute for the Study of Labor (IZA).
- James Heckman & Carolyn Heinrich & Jeffrey Smith, 2002. "The Performance of Performance Standards," NBER Working Papers 9002, National Bureau of Economic Research, Inc.
- Koning, Pierre & Heinrich, Carolyn J., 2010.
"Cream-Skimming, Parking and Other Intended and Unintended Effects of Performance-Based Contracting in Social Welfare Services,"
IZA Discussion Papers
4801, Institute for the Study of Labor (IZA).
- Pierre Koning & C.J. Heinrich, 2009. "Cream-skimming, parking and other intended and unintended effects of performance-based contracting in social welfare services," CPB Discussion Paper 134, CPB Netherlands Bureau for Economic Policy Analysis.
- Bergman, Mats & Lundberg, Sofia, 2011. "Tender Evaluation and Award Methodologies in Public Procurement," UmeÃ¥ Economic Studies 821, Umeå University, Department of Economics.
- Courty, Pascal & Marschke, Gerald, 2002.
"An Empirical Investigation of Gaming Responses to Explicit Performance Incentives,"
CEPR Discussion Papers
3164, C.E.P.R. Discussion Papers.
- Pascal Courty & Gerald Marschke, 2004. "An Empirical Investigation of Gaming Responses to Explicit Performance Incentives," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 23-56, January.
- Gerald Marschke & Pascal Courty, 2002. "An Empirical Investigation of Gaming Responses to Explicit Performance Incentives," Discussion Papers 02-06, University at Albany, SUNY, Department of Economics.
- R. Preston McAfee & John McMillan, 1987. "Competition for Agency Contracts," RAND Journal of Economics, The RAND Corporation, vol. 18(2), pages 296-307, Summer.
- Oecd, 2011. "Centralised Purchasing Systems in the European Union," Sigma Papers 47, OECD Publishing.
- Asker, John & Cantillon, Estelle, 2004.
"Properties of Scoring Auctions,"
CEPR Discussion Papers
4734, C.E.P.R. Discussion Papers.
- Behaghel, Luc & Crépon, Bruno & Gurgand, Marc, 2012. "Private and Public Provision of Counseling to Job-Seekers: Evidence from a Large Controlled Experiment," IZA Discussion Papers 6518, Institute for the Study of Labor (IZA).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Antoine Maartens (+31 626 - 160 892)).
If references are entirely missing, you can add them using this form.