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Optimal Design of Scoring Auction with Multidimensional Quality

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  • Takeshi Nishimura

Abstract

This 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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  • Takeshi Nishimura, 2012. "Optimal Design of Scoring Auction with Multidimensional Quality," Global COE Hi-Stat Discussion Paper Series gd12-238, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hst:ghsdps:gd12-238
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    File URL: http://gcoe.ier.hit-u.ac.jp/research/discussion/2008/pdf/gd12-238.pdf
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    References listed on IDEAS

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    Cited by:

    1. Dastidar, Krishnendu Ghosh & Mukherjee, Diganta, 2014. "Corruption in delegated public procurement auctions," European Journal of Political Economy, Elsevier, vol. 35(C), pages 122-127.
    2. Krishnendu Ghosh Dastidar, 2014. "Scoring auctions with non-quasilinear scoring rules," ISER Discussion Paper 0902, Institute of Social and Economic Research, Osaka University.
    3. Takeshi Nishimura, 2015. "Optimal design of scoring auctions with multidimensional quality," Review of Economic Design, Springer;Society for Economic Design, vol. 19(2), pages 117-143, June.

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