Optimal Design of Scoring Auction with Multidimensional Quality

Takeshi Nishimura

Global COE Hi-Stat Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

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.

Date: 2012-08
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:hst:ghsdps:gd12-238

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