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Probabilistic procurement auctions
TU Berlin, Germany.ORCID iD: 0000-0002-8973-1410
University of York, UK.
2015 (English)In: Review of Economic Design, ISSN 1434-4742, E-ISSN 1434-4750, Vol. 19, no 1, 25-46 p.Article in journal (Refereed) Published
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Text
Abstract [en]

We analyse procurement auctions in which sellers are distinguished on the basis of the ratios of quality per unit of money that they offer. Sellers are privately informed on the offered quality of the technology or good. We assume that the procurer cannot perfectly identify the best offer. Thus, with positive and decreasing probability, the second, third, etc. best ratio offered is selected as the winner of the auction. We model this decision process as based on a general noisy ranking of offers. We show that, although the problem seems to be analytically intractable in general, there exists a simple symmetric, pure-strategy equilibrium in which everyone follows the simple heuristic to match the same ‘focal’ price–quality ratio.

Place, publisher, year, edition, pages
Springer, 2015. Vol. 19, no 1, 25-46 p.
Keyword [en]
Auctions, Contests, Price–quality ratio, Procurement, Scoring
National Category
Economics
Research subject
Economy, Economics
Identifiers
URN: urn:nbn:se:lnu:diva-49426DOI: 10.1007/s10058-014-0161-6OAI: oai:DiVA.org:lnu-49426DiVA: diva2:898853
Available from: 2016-01-29 Created: 2016-01-29 Last updated: 2016-02-05Bibliographically approved

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Giebe, Thomas
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CiteExportLink to record
Permanent link

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Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
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  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
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Output format
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  • asciidoc
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