Authors: Riccardo Camboni, dSEA Unipd Luca Corazzini, Ca' Foscari Stefano Galavotti, University of Bari Paola Valbonesi, dSEA Unipd
When selecting a canteen service for a primary school, prioritizing price over other factors like organic food, meal policies, and quality may not be wise. Scoring rule auctions, which balance price and quality, are commonly used but can be complex. Experimental evidence suggests that this complexity can lead to suboptimal bids. The choice between lowest price, highest quality, or scoring auctions depends on the context. For situations where quality matters most, an auction where the buyer pays a predetermined price for the highest quality bidder is effective. Market designers should consider the potential complexity burdens of their chosen mechanisms.