Hostname: page-component-78c5997874-8bhkd Total loading time: 0 Render date: 2024-11-03T00:42:47.936Z Has data issue: false hasContentIssue false
  • English
  • Français

Efficient procurement with quality concerns*

Published online by Cambridge University Press:  17 August 2016

Pierre-Henri Morand  and
Lionel Thomas
Lionel Thomas
Affiliation:
CRESE, Université de Franche-Comté, France
Get access

Summary

In this paper, we design the optimal procurement mechanisms when bidders are privately informed on efficiency and on observable but neither verifiable nor contractible quality. We show that most of the optimal procurement institutions are mixed procedure implying both separation and pooling. Thus, the existing take-it-or-leave-it offers and procurement auction appear only as polar cases. Moreover, we show that separation and pooling may affect the allocative efficiency of the procurement in a counterintuitive way, such that a less bunching mechanism can be a more inefficient one.

Résumé:

Résumé:

Cet article caractérise les mécanismes d'approvisionnement optimaux, lorsque les offreurs détiennent une information privée sur leur paramètre d'efficacité productive ainsi que sur le niveau de qualité, observable mais ni vérifiable ni contractualisable, qu'ils sont en mesure d'offrir. Nous montrons que la plupart des mécanismes optimaux correspondent à des procédures « mixtes » impliquant simultanément séparation et mélange de cer-tains types d'offreurs, alors que les procédures traditionnelles de la forme « à prendre ou à laisser » ou d'enchère ne s'avèrent optimales que dans des situations extrêmes. De plus, nous établissons que les propriétés mélangeantes ou séparatrices affectent l'efficacité allocative de la procédure, de manière potentiellement contre-intuitive, une procédure moins mélangeante pouvant également être moins efficace.

Keywords

mécanismes optimauxapprovisionnementqualité non-contractualisableD44D82mechanism designprocurementnon-contractible qualityD44D82
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 72 , Issue 2 , 2006 , pp. 129 - 155
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2006 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

**

Université de Franche Comté, UFR SJEPG, 45D avenue de l'Observatoire, 25030 Besançon cedex, France.

*

The authors are very grateful to Mark Armstrong and anonymous referees. Usual disclaimers apply.

References

Armstrong, M. (1999), “Optimal Regulation with Unknown Demand and Cost Functions”, Journal of Economic Theory, 84, pp. 196–215.Google Scholar
Armstrong, M. (2000), “Optimal Multi-object Auctions”, Review of Economic Studies, 67, pp. 455–481.Google Scholar
Armstrong, M. and Rochet, J.C. (1999), “Multi-dimensional Screening: A User’s Guide”, European Economic Review, 43, pp. 959–979.Google Scholar
Armstrong, M. and Vickers, J. (2000), “Multiproduct Price Regulation under Asymmetric Information”, Journal of Industrial Economics, 48, pp. 137–160.Google Scholar
Avery, C. and Hendershott, T. (2000), « Bundling and Optimal Auctions of Multiple Products », Review of Economic Studies, 67, pp. 483–497.Google Scholar
Border, K.C. (1991), “Implementation of Reduced Form Auctions: a Geometric Approach”, Econometrica, 59, pp. 1175–1187.Google Scholar
Branco, F. (1997), “The Design of Multidimensional Auctions”, Rand Journal of Economics, 28, pp. 63–81.Google Scholar
Che, Y.K. (1993), “Design Competition through Multidimensional Auctions”, Rand Journal of Economics, 24, pp. 668–680.Google Scholar
Laffont, J.J. and Martimort, D. (2002), Theory of Incentives: The Principal-Agent Model, Princeton University Press.Google Scholar
Laffont, J.J., Maskin, E. and Rochet, J.C. (1987), “Optimal Non Linear Pricing with Two Dimensional Characteristics”, in Groves, T. Radner, R. and Reiter, S. (eds), Essays in Honor of Leonid Hurwicz, University of Minnesota Press, pp. 256–266.Google Scholar
Manelli, A. and Vincent, D. (1995), “Optimal Procurement Mechanisms”, Econometrica, 63, pp. 591–620.Google Scholar
Morand, P-H and Thomas, L. (2003), “On non-responsiveness in common value models”, Topics in Theoritical Economics, 3–1, article 3.Google Scholar
Myerson, R. (1981), “Optimal Auction Design”, Mathematical of Operations Research, 6, pp. 58–73.Google Scholar
Rezende, L. (2004), “Biased Procurement Auctions”, working paper, University of Illinois.Google Scholar
Rochet, J.C. and Choné, P. (1998), “Ironing, Sweeping, and Multidimensional Screening", Econometrica, 66, pp. 783–826.Google Scholar
Rochet, J.J. and Stole, L. (2003), “The Economics of Multidimensional Screening”, to appear in Dewatripont Hansen, M.L. and Turnovsky, S. (eds.), Advances in Economic Theory, Cambridge University Press.Google Scholar