TY - JOUR
T1 - The role of transparency in procurement
T2 - Revealed versus concealed scoring rules in sealed bid A + B auctions
AU - Quiroga, Bernardo F.
AU - Moritz, Brent B.
AU - Guide, V. Daniel R.
N1 - Funding Information:
Special thanks to Guillermo Burr, David Escobar, and Andrés Cisterna from the Directorate of Public Procurement and Contracting of the Chilean Government, , for their help and time and for providing the research question. The opinions expressed are those of the authors, and do not necessarily reflect the positions of ChileCompra, nor of its employees. We are grateful to co‐editor‐in‐chief Suzanne de Treville, departmental editor Michael Galbreth, and two anonymous referees for their feedback during the review process. We also appreciate thoughtful comments from Ed Coulson, Terry Harrison, Tony Kwasnica, Suresh Muthulingam, Liang Xu, Mikko Ketokivi, Qiang Wang, Robert C. Anderson, Raicho Bojilov, Francisco Ruiz‐Aliseda, Mauricio Larraín, Consuelo Silva, Marco Batarce, and seminar participants at PUC Chile, Universidad de los Andes, ISCI/Universidad de Chile, the 2015 INFORMS annual meeting, the 2016 POMS conference, and the 2019 DSI conference. An earlier version of this research was in Chapter 3 of Quiroga ( 2015 ). All experimental sessions were conducted at the Laboratory for Economics, Management, and Auctions (LEMA) of the Pennsylvania State University. We are also grateful for financial support to conduct experiments from the Smeal College of Business Small Grants program. Quiroga acknowledges support from the Fondecyt Initiation Grant #11191014. All errors are our own. ChileCompra 1
Funding Information:
Special thanks to Guillermo Burr, David Escobar, and Andrés Cisterna from the Directorate of Public Procurement and Contracting of the Chilean Government, ChileCompra, for their help and time and for providing the research question. The opinions expressed are those of the authors, and do not necessarily reflect the positions of ChileCompra, nor of its employees. We are grateful to co-editor-in-chief Suzanne de Treville, departmental editor Michael Galbreth, and two anonymous referees for their feedback during the review process. We also appreciate thoughtful comments from Ed Coulson, Terry Harrison, Tony Kwasnica, Suresh Muthulingam, Liang Xu, Mikko Ketokivi, Qiang Wang, Robert C. Anderson, Raicho Bojilov, Francisco Ruiz-Aliseda, Mauricio Larraín, Consuelo Silva, Marco Batarce, and seminar participants at PUC Chile, Universidad de los Andes, ISCI/Universidad de Chile, the 2015 INFORMS annual meeting, the 2016 POMS conference, and the 2019 DSI conference. An earlier version of this research was in Chapter 3 of Quiroga (2015). All experimental sessions were conducted at the Laboratory for Economics, Management, and Auctions (LEMA) of the Pennsylvania State University. We are also grateful for financial support to conduct experiments from the Smeal College of Business Small Grants program. Quiroga acknowledges support from the Fondecyt Initiation Grant #11191014. All errors are our own.
Publisher Copyright:
© 2020 Association for Supply Chain Management, Inc.
PY - 2021/1
Y1 - 2021/1
N2 - We investigate the impact of using a clear scoring rule in a sealed bid multi-dimensional (A+B) procurement auction, as frequently used in government procurement. The central procurement agency in Chile (ChileCompra) asked for help to understand how concealing the scoring rule affected buyers. Using an experiment, we analyze the effect of transparently communicating the scoring rule on bidding outcomes by comparing the buyer's surplus and supplier profits when buyers expressly communicate the weight they place on a nonmonetary (B) attribute, versus when this information is concealed from bidders. In addition, we compare outcomes where the scoring rule is made visible only after the offers are submitted. If the scoring rule is not disclosed, outcomes are poorer for buyers, and sellers see their profits increase.
AB - We investigate the impact of using a clear scoring rule in a sealed bid multi-dimensional (A+B) procurement auction, as frequently used in government procurement. The central procurement agency in Chile (ChileCompra) asked for help to understand how concealing the scoring rule affected buyers. Using an experiment, we analyze the effect of transparently communicating the scoring rule on bidding outcomes by comparing the buyer's surplus and supplier profits when buyers expressly communicate the weight they place on a nonmonetary (B) attribute, versus when this information is concealed from bidders. In addition, we compare outcomes where the scoring rule is made visible only after the offers are submitted. If the scoring rule is not disclosed, outcomes are poorer for buyers, and sellers see their profits increase.
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U2 - 10.1002/joom.1104
DO - 10.1002/joom.1104
M3 - Article
AN - SCOPUS:85087174250
SN - 0272-6963
VL - 67
SP - 71
EP - 81
JO - Journal of Operations Management
JF - Journal of Operations Management
IS - 1
ER -