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An empirical study of scoring auctions and quality manipulation corruption

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  • Huang, Yangguang

Abstract

We provide a modeling framework for empirical studies of scoring auction data that addresses the problem that scores are intangible and cannot be compared across auctions. We apply the method on a dataset from Chinese server room procurement auctions and provide empirical evidence for the seminal scoring auction model developed by Che (1993) and Asker and Cantillon (2008). Using this method, we study the problem of quality manipulation: the quality evaluating agent may exaggerate the quality score of a favored firm in exchange for a bribe. We propose a test for quality manipulation and perform it on the server room procurement dataset. We find that the bidding behaviors are generally consistent with the competitive model but not the corruption model.

Suggested Citation

  • Huang, Yangguang, 2019. "An empirical study of scoring auctions and quality manipulation corruption," European Economic Review, Elsevier, vol. 120(C).
    • Handle: RePEc:eee:eecrev:v:120:y:2019:i:c:s0014292119301825
    DOI: 10.1016/j.euroecorev.2019.103322
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    Cited by:

    1. Yuanzhu Lu & Xundong Yin & Hu Zhang, 2023. "Does surround‐bidding corruption hurt procurers?," Manchester School, University of Manchester, vol. 91(4), pages 320-335, July.
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    3. Wenzheng Gao & Daiqiang Zhang & Naibao Zhao, 2021. "Uncertainty In Procurement Contracting With Time Incentives," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 62(3), pages 1153-1197, August.
    4. Pasha Andreyanov & Ilia Krasikov & Alex Suzdaltsev, 2024. "Scoring and Favoritism in Optimal Procurement Design," Papers 2411.12714, arXiv.org.

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    More about this item

    Keywords

    Scoring auction; Procurement; Quality manipulation; Test for corruption;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction

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