Favouritism in Scoring Rule Auctions

Riccardo Camboni Marchi Adani (University of Padova)
Paola Valbonesi (University of Padova)

Abstract : Scoring rule auctions (SRAs) can be a powerful mechanism to procure complex works or services, when quality matters. However, given the buyer's discretion in the design of SRAs, favouritism - with its potential positive (i.e. repeated cost-saving interactions) or negative (i.e. corruption) effects on social welfare - can arise. In this paper we empirically document potential favouritism in an original dataset of 196 SRAs for the procurement of canteen services in Italy over the period 2009-2013. We then sketch a simple model highlighting how an SRA with multidimensional quality can be distorted to favour the incumbent bidder winning the competition. Finally, we design and run a new empirical test to verify our theoretical result. We find that SRAs can be distorted to favour the incumbent bidder, and that the victory of the incumbent is associated with less competition and higher prices; and no effect by quality weight in the scoring function on the winning rebate.

Increasing Power System Reserve Capacities by Changing the Reserve Market Design: the Case of Electric Vehicle Fleets

Paul Codani (PSA Group)
Yannick Perez (CentraleSupélec - U. Paris)
Marc Petit (CentraleSupélec)

Abstract : Abstract—Variable Resource Renewable Energy (VRRE) pen- etration has grown rapidly in recent years, creating a need for additional reserve power supplies. Distributed Energy Resources (DERs) have also been identified as reserve power providers, if market rules are favorably modified for these new units. This paper aims to show that the ability of DERs to provide reserve power is dependent on the market design considered, by focusing on primary frequency control and unidirectional Electric Vehicles (EVs). A simulation model is built for an EV fleet taking account of user behaviors. Simulations are conducted considering two market designs: symmetrical (where upward and downward reserves are procured jointly) and asymmetrical (where they are procured separately). In the asymmetrical configuration, the EV fleet performance is also compared on the basis of 1h and 4h market clearing periods. Results show that the EV fleet provides on average nine times as much power under an asymmetrical framework as under a symmetrical one. Similarly, reducing the product duration from 4h to 1h enables the EV fleet to provide more than two times as much reserve power. System operators could implement these favorable market rules for DERs, as it could maximize the provision of reserve power supplies by DERs.

The Length of Ppp Tendering Periods: a Multi-country Analysis

Eoin Reeves (University of Limerick)
Darragh Flannery (University of Limerick)
Rick Geddes (Cornell University)
Donal Palcic (University of Limerick)

Abstract : Substantial infrastructure deficits are a major challenge for countries around the world and PPPs continue to play an important role in addressing the challenge of delivering critical infrastructure. PPPs, however, are often characterised by lengthy tendering periods, defined as the difference between contract notice and financial close. Tendering periods are important because they account for a significant proportion of overall project delivery time. Slow tendering deters bidders and thus reduces competition for contracts. We source data on 1,295 PPP projects in eight countries and use a duration analysis model to empirically examine the factors that impact tendering period duration. Our findings show that there is significant variation across countries and sectors. When we control for other variables we find that Ireland and the United Kingdom stand out as the countries with the longest tendering periods. In sectoral terms the longest tendering periods were found in the health, housing, and defence sectors. However, PPPs in the defence sector are not associated with significantly longer tendering periods once the UK is excluded.