Analyzing Auction and Bargaining Mechanism Design in E-Procurement with Quality Verification and Risk Version
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.
This paper has been withdrawn.