Analyzing Auction and Bargaining Mechanism Design in E-Procurement with Quality Verification and Risk Aversion.
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.
Auctions, Bargaining, E-procurement, Mechanism design, Quality, Risk
Computer Sciences | E-Commerce | Operations Research, Systems Engineering and Industrial Engineering
Information Systems and Management
Operations Research Letters
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. Research Collection School Of Information Systems.
Available at: http://ink.library.smu.edu.sg/sis_research/2728