Scoring Rules in Experimental Procurement

26 Pages Posted: 22 Feb 2018

See all articles by Gian Luigi Albano

Gian Luigi Albano

Consip S.p.A. - The National Central Purchasing Body; LUISS "G. Carli", Department of Economics and Finance

Angela Cipollone

LUISS Guido Carli University

Roberto Di Paolo

University of Alicante, Department of Economics

Giovanni Ponti

Universidad de Alicante - Department of Economic Analysis; University of Ferrara; University College London - ESRC Centre for Economic Learning and Social Evolution (ELSE)

Marco Sparro

Consip SPA

Date Written: February 11, 2018

Abstract

We report the results of a procurement experiments where subjects compete for procurement contracts to be awarded by means of a scoring auction. Two experimental conditions are considered, depending on the relative quality-price weight in the scoring rule. We show that different quality-price weights in the scoring rule dramatically alter the strategic environment and affect the extent to which the competitive mechanism leads to an efficient allocation of the contract. Our evidence suggests that, in spite of inducing significantly higher deviations from equilibrium, the scoring rule that gives more weight to quality over price is far more efficient (52% overall). We propose a “mediation analysis” to explain how the quality-price ratio determines the likelihood that an efficient allocation is realized, disentangling a “direct effect” (due to the equilibrium different properties of the induced game-forms) from an “indirect” one (how the different game-forms affect out-of- equilibrium behaviour).

Keywords: Scoring Auctions, Mechanism Design, Experimental Economics

JEL Classification: C91, D70, D81, D91

Suggested Citation

Albano, Gian Luigi and Cipollone, Angela and Di Paolo, Roberto and Ponti, Giovanni and Sparro, Marco, Scoring Rules in Experimental Procurement (February 11, 2018). Available at SSRN: https://ssrn.com/abstract=3121992 or http://dx.doi.org/10.2139/ssrn.3121992

Gian Luigi Albano (Contact Author)

Consip S.p.A. - The National Central Purchasing Body ( email )

Via Isonzo, 19/E
Rome, 00198
Italy
+39 06 85449.627 (Phone)

LUISS "G. Carli", Department of Economics and Finance ( email )

Via O. Tommasini 1
Rome, Roma 00100
Italy

Angela Cipollone

LUISS Guido Carli University

Via O. Tommasini 1
Rome, Roma 00100
Italy

Roberto Di Paolo

University of Alicante, Department of Economics ( email )

Apartado de Correos 99
Alicante, Apartado d
Spain

Giovanni Ponti

Universidad de Alicante - Department of Economic Analysis ( email )

03080 Alicante
Spain
+34 96 590 3619 (Phone)
+34 96 590 3898 (Fax)

HOME PAGE: http://merlin.fae.ua.es/giuba/

University of Ferrara ( email )

Via del Gregorio 13
Ferrara, 44100
Italy

University College London - ESRC Centre for Economic Learning and Social Evolution (ELSE)

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

Marco Sparro

Consip SPA ( email )

Direzione Acquisti in Rete della Pubblica Amminist
Via Isonzo, 19/E
00198 Roma
Italy

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