Analyzing Auction and Bargaining Mechanisms in E-Procurement with Supply Quality Risk

Analyzing Auction and Bargaining Mechanisms in E-Procurement with Supply Quality Risk

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 repre...

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Bibliographic Details
Main Authors: HUANG, He, XU, Hongyan, Kauffman, Robert J., SUN, Ning
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2013
Subjects:
Computer Sciences
E-Commerce
Management Information Systems
Online Access:https://ink.library.smu.edu.sg/sis_research/2111
http://dx.doi.org/10.1016/j.orl.2013.04.003
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Institution: Singapore Management University
Language: English
Description
Summary: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.

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