Favouritism in scoring rule auctions

Riccardo Camboni Marchi Adani and Paola Valbonesi
Additional contact information
Riccardo Camboni Marchi Adani: University of Verona

No 210, "Marco Fanno" Working Papers from Dipartimento di Scienze Economiche "Marco Fanno"

Abstract: Scoring rule auctions (SRAs) can be a powerful mechanism to procure complex works or services, when quality matters. However, given the buyer?s discretion in the design of SRAs, favouritism - with its potential positive (i.e. repeated cost-saving interactions) or negative (i.e. corruption) effects on social welfare - can arise. In this paper we empirically document potential favouritism in an original dataset of 196 SRAs for the procurement of canteen services in Italy over the period 2009-2013. We then sketch a simple model highlighting how an SRA with multidimensional quality can be distorted to favour the incumbent bidder winning the competition. Finally, we design and run a new empirical test to verify our theoretical result. We fi?nd that SRAs can be distorted to favour the incumbent bidder, and that the victory of the incumbent is associated with less competition and higher prices; and no effect by quality weight in the scoring function on the winning rebate.

Pages: 41 pages
Date: 2016-12
New Economics Papers: this item is included in nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://economia.unipd.it/sites/economia.unipd.it/files/20160210_rev1.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pad:wpaper:0210

Access Statistics for this paper

More papers in "Marco Fanno" Working Papers from Dipartimento di Scienze Economiche "Marco Fanno" Contact information at EDIRC.
Bibliographic data for series maintained by Raffaele Dei Campielisi ().