Cost overrun is ubiquitous in public procurement. We argue that this can be the result of a constraint optimal award … a simple design initially enhances competition in the auction. Moreover, the procurer cannot benefit from using a multi …-dimensional auction, as the optimal scoring rule depends only on the price. …

We analyse procurement auctions in which sellers are distinguished on the basis of the ratios of quality per unit of … ratio offered is selected as the winner of the auction. We model the decision process as based on a general noisy ranking of …

suppliers. We also compare other common contests, in particular, fixed-prize tournaments and auctions. Like bonus tournaments …, auctions implement the socially optimal diversity, but usually with higher rents for the suppliers. Fixed-prize tournaments … implement insufficient diversity, but may nevertheless be preferred by the buyer to auctions because of lower supplier rents. …

the use of these reverse auctions has grown rapidly over the past decades. For the (reverse) unit price auction experience …Many organizations use procurement tenders to buy large amounts of goods and services. Especially in the public sector … competition, incentives in unit price auction change in such a way that can make bid skewing disappear. …

option value. An auction induces the social optimum, while a fixed-prize tournament induces insufficient diversity. The …