Analyzing Auction and Bargaining Mechanism Design in E-Procurement with Quality Verification and Risk Aversion.

Author

H. Huang
H. Xu
Robert John KAUFFMAN, Singapore Management UniversityFollow
N. Sun

Publication Type

Journal Article

Publication Date

7-2013

Abstract

We compare two mechanisms from the buyer’s perspective in multi-attribute supply procurement, with verifiable and unverifiable quality of the supplies and risk aversion to deviation from acceptable quality: an auction mechanism and a generalized Nash bargaining mechanism. We develop a model to represent the effects on the buyer’s dominant strategy of bargaining and auction participation. The results suggest the conditions for which bargaining is preferred over the auction mechanism alone.

Keywords

Auctions, Bargaining, E-procurement, Mechanism design, Quality, Risk

Discipline

Computer Sciences | E-Commerce | Operations Research, Systems Engineering and Industrial Engineering

Research Areas

Information Systems and Management

Publication

Operations Research Letters

Volume

41

Issue

4

First Page

403

Last Page

409

ISSN

0167-6377

Identifier

10.1016/j.orl.2013.04.003

Publisher

Elsevier

Citation

Huang, H.; Xu, H.; KAUFFMAN, Robert John; and Sun, N.. Analyzing Auction and Bargaining Mechanism Design in E-Procurement with Quality Verification and Risk Aversion.. (2013). Operations Research Letters. 41, (4), 403-409.
Available at: https://ink.library.smu.edu.sg/sis_research/2728