original papers: Implementing optimal procurement auctions with exogenous quality

Florence Naegelen

Review of Economic Design, 2002, vol. 7, issue 2, 135-153

Abstract: In this paper, we consider the implementation of the optimal procurement auction outcome when there is a trade-off between price and quality for the buyer. The quality proposals of the competing firms are assumed to be exogenous and common knowledge. After defining the optimal auction, we characterize the discriminatory first score auction and the modified second score auction implementing it when the buyer is assumed to have the same information as the firms. Then we consider an auction which requires no specific information from the buyer and show that a second score auction followed by a negotiation stage can implement the optimal auction outcome under this more realistic assumption.

Keywords: Auction; discrimination; implementation; procurement; quality (search for similar items in EconPapers)
JEL-codes: D44 H57 L15 (search for similar items in EconPapers)
Date: 2002-10-09
Note: Received: 30 March 2001 / Accepted: 14 December 2001
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Citations: View citations in EconPapers (6)

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