The effect of quality evaluation and incomplete monitoring on procurement auctions

2022 Fiscal Year Final Research Report

• Project/Area Number: 17KK0067
• Research Category: Fund for the Promotion of Joint International Research (Fostering Joint International Research)
• Allocation Type: Multi-year Fund
• Research Field: Economic policy
• Research Institution: Nagoya University
• Principal Investigator: Hanazono Makoto 名古屋大学, 経済学研究科, 教授 (60362406)
• Project Period (FY): 2018 – 2022
• Keywords: procurement / scoring auctions

Outline of Final Research Achievements

We show that in procurement auctions, providing stronger incentives to exert effort backfires due to incomplete monitoring and fear of bankruptcy: it leads to adverse selection in auctions where financially weaker firms that are more likely to bankrupt tend to win. Moreover the cost efficiency deteriorates as well. We also work on the foundation of scoring auctions and establish a theory and a methodology for structural estimation, allowing general scoring rule and multidimensional type space.

Free Research Field

Industrial Organization

Academic Significance and Societal Importance of the Research Achievements

本研究の社会的意義は、調達入札の制度設計に関する重要な示唆、改善の方向性を与えたことにある。具体的には、事後的な業績評価やそのインセンティブ設計がもたらす問題点・トレードオフ（強いインセンティブが逆選択を招く）を明らかにしたことである。学術的意義としては、本研究により拡張された調達入札のゲーム理論的な基盤整備により、今後の理論的研究の発展や構造推定を通じた実証研究の促進が期待されることを挙げられる。