Multi dimensional Auction in economics I am following this paper . They have different suppliers and one buyer and They are using auction to select best suppliers Suppliers will submit. suppliers offer a multidimensional bidding on quality Q and price p. The “quality” Q includes not only the quality of the product or service but also all its nonmonetary characteristics. The buyer derives utility from a contract
U(Q,p)= V(Q)− p
where V(.) is the buyer's valuation function of quality Q
The best suppliers will be selected using a scoring rule
S(Q,p)= V(Q)− p
I am confused there . Is this scoring rule is any standard in economics to calculate bet suppliers? Or this concept comes from? any one here to help
https://onlinelibrary.wiley.com/doi/epdf/10.1002/mde.3237
From the buyer's point of view, the &quot;best&quot; supplier is the one who offers them the highest utility. Using the utility function for scoring suppliers seems quite natural then. (In this paper the utility function is assumed to be quasilinear in money, which is just for simplicity.)