Equilibrium in Scoring Auctions

32 Pages Posted: 26 Nov 2004

See all articles by John Asker

John Asker

UCLA

Estelle Cantillon

Free University of Brussels (VUB/ULB) - ECARES; Centre for Economic Policy Research (CEPR)

Date Written: December 2004

Abstract

This paper studies multi-attribute auctions in which a buyer seeks to procure a complex good and evaluate offers using a quasi-linear scoring rule. Suppliers have private information about their costs, which is summarized by a multi-dimensional type. The scoring rule reduces the multidimensional bids submitted by each supplier to a single dimension, the score, which is used for deciding on the allocation and the resulting contractual obligation. We exploit this idea and obtain two kinds of results. First, we characterize the set of equilibria in quasi-linear scoring auctions with multi-dimensional types. In particular, we show that there exists a mapping between the class of equilibria in these scoring auctions and those in standard single object IPV auctions. Second, we prove a new expected utility equivalence theorem for quasi-linear scoring auctions.

Keywords: Auctions, Procurement

JEL Classification: H57, D44

Suggested Citation

Asker, John William and Cantillon, Estelle, Equilibrium in Scoring Auctions (December 2004). FEEM Working Paper No. 148.04, Available at SSRN: https://ssrn.com/abstract=624466 or http://dx.doi.org/10.2139/ssrn.624466

John William Asker (Contact Author)

UCLA ( email )

8283 Bunche Hall
Los Angeles, CA 90095-1477
United States

Estelle Cantillon

Free University of Brussels (VUB/ULB) - ECARES ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
B-1050 Brussels
Belgium
+32 2 650 3840 (Phone)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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