Abstract: In auctions for contracts, fostering bidder competition often comes at the cost of poor quality of the execution. We empirically analyze the case of a large utility company switching from price-only auctions to scoring auctions weighting price-and-past-performance. We show how the announcement of the switch caused substantial improvements in both contract performance (compliance with the safety and quality standards audited goes from 25 percent to 90 percent) and the quality of the utility services, but no significant price increase. We also structurally estimate a model of the scoring auctions to evaluate how prices, performance and markups are affected by different market designs.
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