Procurement when price and quality matter
John Asker and
ULB Institutional Repository from ULB -- Universite Libre de Bruxelles
A buyer seeks to procure a good characterized by its price and its quality from suppliers who have private information about their cost structure ( xed cost and marginal cost of providing quality). We characterize the buyers optimal buying mechanism. We then use the optimal mechanism as a theoretical and numerical benchmark to study simpler buying procedures such as scoring auctions and bargaining. Scoring auctions can extract a signifi cant proportion of the buyers strategic surplus (the difference between the expected utility from the optimal mechanism and the e¢ cient auction). Bargaining does less well and often does worse than the e¢ cient auction.
References: Add references at CitEc
Citations: View citations in EconPapers (86) Track citations by RSS feed
Published in: The Rand journal of economics (2010) v.41 n° 1,p.1-34
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Journal Article: Procurement when price and quality matter (2010)
Working Paper: Procurement when Price and Quality Matter (2007)
Working Paper: Procurement When Price and Quality Matter (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ulb:ulbeco:2013/99378
Ordering information: This working paper can be ordered from
http://hdl.handle.ne ... ulb.ac.be:2013/99378
Access Statistics for this paper
More papers in ULB Institutional Repository from ULB -- Universite Libre de Bruxelles Contact information at EDIRC.
Bibliographic data for series maintained by Benoit Pauwels ().