Multidimensional Scoring Auctions with Renewable Energy
| Thesis title in Czech: | Multidimenzionální aukce s obnovitelnými zdroji |
|---|---|
| Thesis title in English: | Multidimensional Scoring Auctions with Renewable Energy |
| Academic year of topic announcement: | 2024/2025 |
| Thesis type: | Bachelor's thesis |
| Thesis language: | angličtina |
| Department: | Institute of Economic Studies (23-IES) |
| Supervisor: | doc. PhDr. Martin Gregor, Ph.D. |
| Author: | hidden - assigned by the advisor |
| Date of registration: | 30.06.2025 |
| Date of assignment: | 03.07.2025 |
| Guidelines |
| In auctions with multiple attributes, it often happens that the contracted values of certain attributes are different from their realized values; for instance, the quality is lower than initially described. The difference between the realized (ex post) quality and the promised (ex ante) quality is an example of the differences between the ex post and ex ante contract, and thus can be generalized to differences in any dimension/attribute of the contract (such as price). This links the analysis of the differences in quality to the analysis of extra costs in procurements and how buyers protect themselves against these differences in general (i.e., the difference between the ex ante contracted/announced price and the ex post price).
This thesis should look into this phenomenon in the context of renewable energy sources. Specifically, it is interesting to study how the buyer procures if she can anticipate that these differences exist. In particular, if these differences can be correctly anticipated, then the buyer (ex ante) has a correct expectation of the ex post price/quality, and can use these expectations in the ex ante scoring rule. The key question is thus to what extent is the buyer actually harmed by the seller's ability to distort the quality (and price). |
| References |
| Asker, J., & Cantillon, E. (2008). Properties of scoring auctions. The RAND Journal of Economics, 39(1), 69-85.
Burguet, R. (2017). Procurement design with corruption. American Economic Journal: Microeconomics, 9(2), 315-341. Che, Y. K. (1993). Design competition through multidimensional auctions. The RAND Journal of Economics, 668-680. Huang, Y., & Xia, J. (2019). Procurement auctions under quality manipulation corruption. European Economic Review, 111, 380-399. |
| Preliminary scope of work |
| As a benchmark, the thesis begins with a setting where ex post price and quality are identical to ex ante price and quality. In this setting, the properties of the optimal scoring rule as in Che (1993) are reviewed. In particular, the thesis will show whether the result that it is suboptimal to commit to a scoring rule based on "true" preferences is robust.
Next, the thesis will look into under what conditions the general result on the superiority of scoring auctions over the other kinds of auctions (Asker and Cantillon 2008) holds. Understanding these conditions will be helpful in the subsequent section when quality manipulation is specifically analyzed. In the next part, quality manipulation is analyzed, using, among others, Burguet (2017) and Huang and Xia (2019). Finally, the analysis will be applied to renewables. The thesis will specifically look into which institutional and technical characteristics can be exploited when selecting the most appropriate model. Also, we are interested in which constraints/limits to buyers affect how manipulation can be tackled. |
| Preliminary scope of work in English |
| As a benchmark, the thesis begins with a setting where ex post price and quality are identical to ex ante price and quality. In this setting, the properties of the optimal scoring rule as in Che (1993) are reviewed. In particular, the thesis will show whether the result that it is suboptimal to commit to a scoring rule based on "true" preferences is robust.
Next, the thesis will look into under what conditions the general result on the superiority of scoring auctions over the other kinds of auctions (Asker and Cantillon 2008) holds. Understanding these conditions will be helpful in the subsequent section when quality manipulation is specifically analyzed. In the next part, quality manipulation is analyzed, using, among others, Burguet (2017) and Huang and Xia (2019). Finally, the analysis will be applied to renewables. The thesis will specifically look into which institutional and technical characteristics can be exploited when selecting the most appropriate model. Also, we are interested in which constraints/limits to buyers affect how manipulation can be tackled. |