Probabilistic procurement auctions

Repeated Procurement Auctions

Sequential Procurement Auctions

Procurement by governments accounts for 10-15 percent of national product in most Western nations [McAfee and McMillan (1985a)]. Consequently, analyses of procurement policies apply to a significant portion of economic activity. This paper considers sequential procurement: a buyer will purchase items in sequence, with costs correlated across time. Thus, if auctions are held, bids in the first a...

Industrial Procurement Auctions

As illustrated in the previous chapters, combinatorial auctions have successfully been applied to various application domains, such as the allocation of airspace system resources (Chapter 20), truckload transportation (Chapter 21) and bus routes (Chapter 22). Industrial procurement is potentially a huge application domain for combinatorial auctions, and it has turned into a topic of interest fo...

Budget Feasible Procurement Auctions

We consider a simple and well-studied model for procurement problems and solve it to optimality. A buyer with a fixed budget wants to procure, from a set of available workers, a budget feasible subset that maximizes her utility: Any worker has a private reservation price and provides a publicly known utility to the buyer in case of being procured. The buyer’s utility function is additive over i...

Comparing Public Procurement Auctions

This paper contrasts two auction formats often used in public procurement: first price auctions with ex-post screening of bid responsiveness and average bid auctions, in which the bidder closest to the average bid wins. The equilibrium analysis reveals that their ranking is ambiguous in terms of revenues, but the average bid auction is typically less efficient. Using a dataset of Italian public...