Procurement Auctions and Negotiations: An Empirical Comparison

This is an Accepted Manuscript of an article published by Taylor & Francis Group in Journal of Organizational Computing and Electronic Commerce on Aug. 2, 2017, available online: http://www.tandfonline.com/10.1080/10919392.2017.1363576.Real world procurement transactions often involve multiple attributes and multiple vendors. Successful procurement involves vendor selection through appropriate market mechanisms. The advancement of information technologies has enabled different mechanisms to be applied to similar procurement situations. Advantages and disadvantages of using such mechanisms remain unclear. The presented research compares two types of mechanisms: multi-attribute reverse auctions and multi-attribute multi-bilateral negotiations in e-procurement. Both laboratory and online experiments were carried out to examine their effects on the process, outcomes and suppliers’ assessment. The results show that in procurement, reverse auctions were more efficient than negotiations in terms of the process. Auctions also led to greater gains for the buyers than negotiations but the suppliers’ profit was lower in auctions. The buyer and the winning supplier jointly reached more efficient and balanced contracts in negotiations than in auctions. The results also show that the suppliers’ assessment was affected by their outcomes: the winning suppliers had a more positive assessment towards the process, outcomes and the system. The findings are consistent in both the laboratory and online settings. The implications of this study for practitioners and researchers are discussed

Three Studies on Multi-attribute Market Mechanisms in E-procurement

Successful e-procurement depends on selecting the appropriate mechanisms that comprise rules governing and facilitating transaction process. Existing mechanisms have theoretical or practical limitations such as limited number of attributes, disclosure of buyer’s preferences and costly processes. The present research addresses these issues through three studies. Study 1 presents two feasible mechanisms for multi-attribute multi-supplier transactions. They allow buyers to control preference representation and information revelation, assuring that suppliers obtain sufficient information in making effective proposals while protecting confidential information. Following the design-science approach, the mechanisms are implemented to support multi-attribute reverse auctions and multi-bilateral negotiations. Study 2 examines the revelation of information in multi-attribute reverse auctions. Three revelation rules are formulated with admissible bids, winning bids and all bidders’ bids. Their effects on the process, outcomes and bidders’ assessment are tested in two experiments. The results show significant improvement in process efficiency when more information is revealed. The suppliers reached better outcomes with either admissible bids only or all bidders’ bids, while the buyers gained more when revealing the winning bids only. Bidders were more satisfied with the outcomes and system when more information was provided. Study 3 compares multi-attribute reverse auctions and multi-bilateral negotiations in both laboratory and online experiments. The results show that auctions are more efficient than negotiations in terms of the process. Auctions led to greater gains for the buyers, whereas more balanced contracts were reached in negotiations. Suppliers’ assessment was affected by their outcomes, and the winning suppliers were more satisfied with the process, outcomes and system. The buyer’s role was also examined. Different types of information conveyed from buyer influence suppliers’ behavior in making bids/offers and concessions, which in turn affected buyer’s gains. This research provides implications to future studies and practices in e-procurement, in particular, the formulation of a procedure of two multi-attribute mechanisms and the formulation of general guidelines for strategic use of different mechanisms in various e-procurement contexts

Federal Register

Daily publication of the U.S. Office of the Federal Register contains rules and regulations, proposed legislation and rule changes, and other notices, including "Presidential proclamations and Executive Orders, Federal agency documents having general applicability and legal effect, documents required to be published by act of Congress, and other Federal agency documents of public interest" (p. ii). Table of Contents starts on page iii