Bidding on Price and Quality: An Experiment on the Complexity of Scoring Rule Auctions
|Článek v odborném periodiku
|Časopis / Zdroj
|The Review of Economics and Statistics
|Fakulta / Pracoviště MU
|laboratory experiment; procurement auctions; scoring rule auctions; multiattribute auctions; complexity
|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.