Auction scope, scale and pricing format : agent-based simulation of the performance of a water quality tender

This report presents results from an agent-based modelling study undertaken as a component of the Lower Burdekin Dry Tropics Water Quality Improvement Tender Project. The project was developed with the aim of exploring issues of scope and scale in tender design (Rolfe et al. 2007). It involved the conducting of a trial auction, an experimental workshop and this agent-based modelling (or computational experiments) component. The objectives of the project are to assess whether and how increases in scale and scope of a tender may lead to efficiency gains and investigate the extent to which these gains might be offset as a result of higher transaction costs and/or lower participation rates.