Agenzia del Demanio
Institutional Affiliation: Agenzia del Demanio
NBER Working Papers and Publications
|November 2016||Past Performance and Procurement Outcomes|
with Francesco Decarolis, Giancarlo Spagnolo: w22814
Reputational incentives may be a powerful mechanism for improving supplier performance. We analyze their role in contract awarding, exploiting an experiment run by a firm which introduced a new vendor rating system scoring suppliers' past performance and linking it to the award of future contracts. We study responses in both price and performance to the announcement of the switch from price-only to price-and-rating auctions. Across the 136 parameters scored, overall compliance improves from 25 percent to 80 percent. Improvements involve all parameters and suppliers, but are more pronounced for parameters receiving a higher weight in the announced scoring auction. Prices do not significantly change overall, but we find some evidence of lower prices right after the announcement when supplier...