Abstract: For the life expectancy of single major medical equipment cannot be observed or verified and it is one of the key quality indicators,it has no meaning to directly bid for this quality attribute. To this problem, warranty is introduced into bidding mechanism of hospital procurement as an important decision variable, and a new multi-attribute bidding model with signal transduction function is established based on the auction mechanism design theory. The optimal bidding rules, including best bid for equipment life expectancy,best bid for equipment warranty, and the best price to pay is defined in the model. A mechanism that could identify enterprises' technology types and transmit information about product quality reliability is also established. The results show that: firstly, this mechanism satisfied participation constraint and incentive compatibility constraint.In other words, bidding enterprises can bid for the maximal profits separately according to their own expectations;Secondly, this optimal mechanism ensures a positive correlation between life expectancy and warranty that enterprises committed. It also ensures enterprises, which are the highest technical types and provide maximum product life expectancy (warranty period the longest), win the bidding. It also ensure the successful company create a relatively highest social welfare. A example is used to illustrate the new mechanism which is enforceable and easy to operate. A new idea when the quality dimension can not be observed and verified is provided by the research.

Key words: warranty, multi-attributes, bidding, signal transmission, mechanism design