Theory-Experimental Seminar

Roberto di Paolo

Universidad de Alicante

23-Apr-2018

Seminar 3 – 14:30

Abstract

We compare two of the two most popular classes of mechanisms used in real-life procurement: absolute vs. relative scoring rules. The former are those functions which assign to each tender, and for each dimension to be evaluated, a score which is independent from the other submitted tenders; the latter are those functions for which the score assigned to one tender depends on the tenders submitted by some of -or all- the other competitors. Our experimental design consists in two treatments (between-subject design), in which absolute (T1) and relative (T2) scoring rules are employed, respectively. T2 are run first, so that we can employ the same parameters of the scoring functions (endogenously determined by bidders’ behavior) observed in T2 to calibrate the absolute scores of T1, to be submitted in later sessions to a different subject sample. This allows to identify the role of bid interdependence in subjects’ behavior and, consequently, in the resulting market efficiency.

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