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.
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 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
Date of revision:
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.:
- Jean-Jaques Laffont & Jean Tirole, 1985.
"Auctioning Incentive Contracts,"
403, Massachusetts Institute of Technology (MIT), Department of Economics.
- repec:ulb:ulbeco:2013/8999 is not listed on IDEAS
- Milgrom,Paul, 2004.
"Putting Auction Theory to Work,"
Cambridge University Press, number 9780521551847.
- Paul Milgrom & Ilya Segal, 2002. "Envelope Theorems for Arbitrary Choice Sets," Econometrica, Econometric Society, vol. 70(2), pages 583-601, March.
- John Asker & Estelle Cantillon, 2010.
"Procurement when price and quality matter,"
RAND Journal of Economics,
RAND Corporation, vol. 41(1), pages 1-34.
- John Asker & Estelle Cantillon, 2006. "Procurement When Price and Quality Matter," Working Papers 06-24, New York University, Leonard N. Stern School of Business, Department of Economics.
- John Asker & Estelle Cantillon, 2010. "Procurement when Price and Quality Matter," ULB Institutional Repository 2013/99378, ULB -- Universite Libre de Bruxelles.
- Asker, John & Cantillon, Estelle, 2007. "Procurement when Price and Quality Matter," CEPR Discussion Papers 6082, C.E.P.R. Discussion Papers.
- Riordan, Michael H & Sappington, David E M, 1987. "Awarding Monopoly Franchises," American Economic Review, American Economic Association, vol. 77(3), pages 375-87, June.
- John Asker & Estelle Cantillon, 2008.
"Properties of scoring auctions,"
RAND Journal of Economics,
RAND Corporation, vol. 39(1), pages 69-85.
- R. Preston McAfee & John McMillan, 1987. "Competition for Agency Contracts," RAND Journal of Economics, The RAND Corporation, vol. 18(2), pages 296-307, Summer.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tatsuji Makino).
If references are entirely missing, you can add them using this form.