1,805 research outputs found

    Do e-auctions increase the risk of bid-rigging?

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    In my recent research on electronically conducted auctions (e-auctions), one of the most common procurement tools that public bodies use in order to acquire goods or services, I argue that some elements of the current procurement practice increase the risk of collusion and that the new EU Directive on public procurement has not managed to adequately deal with those issues

    Inefficiencies in Digital Advertising Markets

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    Digital advertising markets are growing and attracting increased scrutiny. This article explores four market inefficiencies that remain poorly understood: ad effect measurement, frictions between and within advertising channel members, ad blocking, and ad fraud. Although these topics are not unique to digital advertising, each manifests in unique ways in markets for digital ads. The authors identify relevant findings in the academic literature, recent developments in practice, and promising topics for future research

    An Empirical Exploration of Multi-Attribute Bidding: Redefining Intermediary Roles in Electronic Markets

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    The vast majority of electronic markets have been based purely on a single variable (price) as the factor that determines ‘the winner’. Multi-attribute auctions are likely to be more appropriate for procurement scenarios where factors other than price need to be considered in determining the outcome. Nevertheless, there is a scarcity of empirical research on multi-attribute electronic auctions. In particular, there is little empirical evidence of how multi-attribute auctions fit with our theoretical conceptualisation of electronic markets. This paper uses the market design aspects of multi-attribute auctions to explore a multivariable electronic auction, using frameworks from electronic market process design and systematic sourcing. Evidence from the case study illustrates that multi-variable electronic auctions can be used to procure a wider range of operating and manufacturing input that has been considered possible with traditional, price only, auctions. The findings reveal how the use of an electronic auction intermediary creates a middle ground of interaction between spot and systematic sourcing, by automating for the buyer certain general parameters and trade context processes

    Market-based Allocation of Local Flexibility in Smart Grids: A Mechanism Design Approach

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    Trust and Trustworthiness in Procurement Contracts with Retainage

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    When product quality is unverifiable by third parties, enforceable contracts that condition price upon quality are not feasible. If higher quality is also costly to deliver, moral hazard by sellers flourishes, particularly when procurement is via a competitive auction process. Retainage is a contractual mechanism that presents a solution to the third-party unverifiability problem, by setting aside a portion of the purchase price. After delivery, the buyer has sole discretion over the amount of retainage money that is released to the seller. While generally a feasible contract form to implement, retainage introduces a moral hazard for the buyer. We use laboratory experiments to investigate how and when retainage might be successfully used to facilitate trust and trustworthiness in procurement contracts. We observe that retainage induces a significant improvement in product quality when there are some trustworthy buyers in the population, consistent with a model of fair payment norms that we develop. This improvement is realized at the cost of increased buyer-seller profit inequalities. We also observe that at high levels of retainage, there is a welfare-decreasing market unraveling in which sellers do not bid on contracts. Our results imply that retainage incentives can mitigate the tension between competition and cooperation arising from reverse auctions, but only at appropriate levels of retainage

    Bidding Markets

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    The existence of a ‘bidding market’ is commonly cited as a reason to tolerate the creation or maintenance of highly concentrated markets. We discuss three erroneous arguments to that effect: the ‘consultants’ fallacy’ that ‘market power is impossible’, the ‘academics’ fallacy’ that (often) ‘market power does not matter’, and the ‘regulators’ fallacy’ that ‘intervention against pernicious market power is unnecessary’, in markets characterized by auctions or bidding processes. Furthermore we argue that the term ‘bidding market’ as it is widely used in antitrust is unhelpful or misleading. Auctions and bidding processes do have some special features—including their price formation processes, common-values behaviour, and bid-taker power—but the significance of these features has been overemphasized, and they often imply a need for stricter rather than more lenient competition policy.Bidding Markets, Auctions, Antitrust, Competition Policy, Bidding, Market Power, Private Values, Common Values, Anti-trust

    Electricity pricing and market power

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    Software Characteristics of B2B Electronic Intermediaries: A Novel Design Science Approach

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    Long being seen as commercially unsuccessful after the dot-com era, web-based B2B electronic intermediaries are currentlyundergoing a renaissance driven by globalization and an ever increasing cost-pressure on procurement departments ofenterprises. These systems are getting more sophisticated almost by the day, which is also reflected by numerous relatedscientific articles. This development raises the question of the latest characteristics of such systems scientifically described.In order to answer this question, the work at hand depicts the results of a novel design science approach based on a structuredliterature review. The outcomes of this research are i) a state-of-the-art overview of scientifically described softwarecharacteristics of B2B electronic intermediaries, and ii) a taxonomy for structuring software characteristics of this type ofsystems. The results may help practitioners to further develop B2B electronic intermediaries and e-procurement systems, andwill serve as a basis for future research endeavors in the field

    Online Auctions

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    The economic literature on online auctions is rapidly growing because of the enormous amount of freely available field data. Moreover, numerous innovations in auction-design features on platforms such as eBay have created excellent research opportunities. In this article, we survey the theoretical, empirical, and experimental research on bidder strategies (including the timing of bids and winner's-curse effects) and seller strategies (including reserve-price policies and the use of buy-now options) in online auctions, as well as some of the literature dealing with online-auction design (including stopping rules and multi-object pricing rules).
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