This study assesses the rapidly growing literature on scoring rule auctions (SRA), in which all participants submit a multidimensional bid comprising prices and levels of one or more qualities. These elements are weighted using a linear combination, that is, the scoring function. The result of this function is a score and the bid that obtains the highest score is awarded the contract. We provide a comprehensive overview of key theoretical and empirical results. In addition, we discuss structural estimation techniques applied to SRA and we conclude with three main limitations of this awarding mechanism.
Procuring price and quality using scoring auctions: where do we stand?
Camboni Marchi Adani R.
2018
Abstract
This study assesses the rapidly growing literature on scoring rule auctions (SRA), in which all participants submit a multidimensional bid comprising prices and levels of one or more qualities. These elements are weighted using a linear combination, that is, the scoring function. The result of this function is a score and the bid that obtains the highest score is awarded the contract. We provide a comprehensive overview of key theoretical and empirical results. In addition, we discuss structural estimation techniques applied to SRA and we conclude with three main limitations of this awarding mechanism.
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