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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
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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 

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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.

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