Bidding on Price and Quality: An Experiment on the Complexity of Scoring Rule Auctions

Riccardo Camboni, Luca Corazzini, Stefano Galavotti and Paola Valbonesi
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Riccardo Camboni: University of Padova
Luca Corazzini: University of Milan-Bicocca; Masaryk University Experimental Economics Laboratory
Stefano Galavotti: University of Bari
Paola Valbonesi: University of Padova

The Review of Economics and Statistics, 2025, vol. 107, issue 3, 755-770

Abstract: We experimentally study procurement auctions when both quality and price matter. We compare two treatments where sellers compete on one dimension only (price or quality), with three treatments where sellers submit a price-quality bid and the winner is determined by a scoring rule that combines the two offers. We find that, in the scoring rule treatments, efficiency and buyer’s utility are lower than predicted. Estimates from a Quantal Response Equilibrium model suggest that increasing the dimension of the strategy space imposes a complexity burden on sellers, so that a simpler mechanism like a quality-only auction may be preferable.

Date: 2025
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