Multidimensional Auctions and Scoring Rules


  • Remco Paulissen



An auction is a mechanism to buy (sell) a product or service, where potential sellers (buyers) have to submit bids, which fully determine the winner of the auction and the price he or she has to pay (or receives). The main objective of this study is to determine what the maximum possible total welfare resulting from a multidimensional procurement auction can be in certain settings, to derive equilibria for first-score, second-score and second-preferred-offer auctions and to see under which conditions the maximum possible total welfare is obtained in these equilibria. Some of the results which will be obtained are that there exist ex-post equilibria as well as a dominant strategy equilibrium in second-score auctions, while there exist only ex-post equilibria in first-score and second-preferred-offer auctions and that the maximum possible total welfare is obtained in any ex-post equilibrium of a first-score auction in which the scoring rule equals the buyer's true utility function. 


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