Bidding on Price and Quality: An Experiment on the Complexity of Scoring Rule Auctions

CAMBONI, Riccardo, Luca CORAZZINI, Stefano GALAVOTTI and Paola VALBONESI. Bidding on Price and Quality: An Experiment on the Complexity of Scoring Rule Auctions. The Review of Economics and Statistics. Washington: The MIT Press, 2024, 45 pp. ISSN 0034-6535. Available from: https://dx.doi.org/10.1162/rest_a_01288.

Basic information

• Original name: Bidding on Price and Quality: An Experiment on the Complexity of Scoring Rule Auctions
• Authors: CAMBONI, Riccardo, Luca CORAZZINI, Stefano GALAVOTTI and Paola VALBONESI.
• Edition: The Review of Economics and Statistics, Washington, The MIT Press, 2024, 0034-6535.

Other information

• Original language: English
• Type of outcome: Article in a journal
• Field of Study: 50202 Applied Economics, Econometrics
• Country of publisher: United States of America
• Confidentiality degree: is not subject to a state or trade secret
• WWW: URL
• Impact factor: Impact factor: 8.000 in 2022
• Organization unit: Faculty of Economics and Administration
• Doi: http://dx.doi.org/10.1162/rest_a_01288
• Keywords in English: laboratory experiment; procurement auctions; scoring rule auctions; multiattribute auctions; complexity
• Tags: International impact, Reviewed

Abstract

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.