Scoring Auction by an Informed Principal
This paper considers a scoring auction used in procurement. In this auction, each supplier offers both price and quality, and a supplier whose offer achieves the highest score wins. The environment we consider has two features: the buyer has private information and quality is multi-dimensional. We show that a scoring auction implements the ex ante optimal mechanism for the buyer when the value complementarity between quality attributes is sufficiently greater than the cost substitutability. We further show how the buyer should design scoring rules.
|Date of creation:||Feb 2012|
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- Asker, John & Cantillon, Estelle, 2004.
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CEPR Discussion Papers
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- John Asker & Estelle Cantillon, 2006.
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06-24, New York University, Leonard N. Stern School of Business, Department of Economics.
- Asker, John & Cantillon, Estelle, 2007. "Procurement when Price and Quality Matter," CEPR Discussion Papers 6082, C.E.P.R. Discussion Papers.
- John Asker & Estelle Cantillon, 2010. "Procurement when Price and Quality Matter," ULB Institutional Repository 2013/99378, ULB -- Universite Libre de Bruxelles.
- Maskin, Eric & Tirole, Jean, 1990. "The Principal-Agent Relationship with an Informed Principal: The Case of Private Values," Econometrica, Econometric Society, vol. 58(2), pages 379-409, March.
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- Thomas Troeger & Tymofiy Mylovanov, 2010. "Optimal Auction Design and Irrelevance of Privacy of Information," 2010 Meeting Papers 1039, Society for Economic Dynamics.
- Guofu Tan, 1996. "Optimal Procurement Mechanisms for an Informed Buyer," Canadian Journal of Economics, Canadian Economics Association, vol. 29(3), pages 699-716, August.
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