Optimal Design of Scoring Auction with Multidimensional Quality
AbstractThis article studies the optimal design of scoring auction used in public procurement. In this auction, each supplier's offer consists of both price and quality, and a supplier whose offer achieves the highest score wins. The environment we consider has the feature that quality is multi-dimensional. We show that there exists a quasi-linear scoring rule which implements the optimal mechanism for the buyer and is supermodular in quality if the virtual surplus is quasisupermodular in quality. We further investigate how the buyer should classify quality attributes when using a scoring rule which is additively separable in the attributes.
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Bibliographic InfoPaper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd12-238.
Date of creation: Aug 2012
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