NegotiAuction: An experimental study

Pham, Long; Зайцев, А. И.; Steiner, Robert L.; Teich, Jeffrey E.

doi:10.1016/j.dss.2013.06.011

Cited by 4 publications

(3 citation statements)

References 39 publications

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“…Approaches that use decision-analytic methods (e.g., multiattribute utility theory, analytic hierarchy process, ELECTRE, SMART) for the construction of market participants' utilities allow for interdependencies and trade-offs between all attributes, including price (Bichler and Kalagnanam 2005, Kameshwaran et al 2007, Gwebu 2009). Additionally, hybrid approaches in which auctions are augmented with negotiations employ monotonic but not quasilinear preferences (Teich et al 2006, Pham et al 2013. These approaches are concerned with the bidding strategies leading to efficient bids, including discovery of the buyer's preferences, which is necessary for effective bidding.…”

Section: Multiattribute Auctionsmentioning

confidence: 99%

Multiattribute Procurement Auctions: Efficiency and Social Welfare in Theory and Practice

Kersten

2014

Decision Analysis

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To cite this article: Gregory E. Kersten (2014) Multiattribute Procurement Auctions: Efficiency and Social Welfare in Theory and Practice. Decision Analysis 11(4):215-232. http://dx.O ne of the standard assumptions in auction theory is that preferences can be represented with quasilinear utility. This assumption is of particular significance in reverse auctions, which are used in procurement. This paper presents an analysis of quasilinear utilities and their implications. Building on observations of scholars in economics and decision sciences, who note that quasilinear preferences may be rare in practice, the paper shows that in the procurement of goods and services, price is often interrelated with costs. When preferences can be represented with convex or concave utilities, the alternatives in which the buyer's surplus is maximized are different from those that maximize social welfare. The result is that reverse auctions may cause a significant loss of social welfare, which is of particular significance for public organizations. The analysis of concave efficient frontiers in the utility space shows that it is possible to determine deals that yield greater social welfare than the winning bids. If the winning seller is willing to share the increase in utility with the buyer who faces a loss, then these alternatives can produce, for both the buyer and the seller, utility values that are higher than the utility values produced by the winning bid.

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Section: Multiattribute Auctionsmentioning

confidence: 99%

Multiattribute Procurement Auctions: Efficiency and Social Welfare in Theory and Practice

Kersten

2014

Decision Analysis

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“…Talvez por essa razão tendem a ser mais usados em vendas online (Pham, 2013;Teich et al, 2001). Nesse contexto, pode-se dizer que a negociação após a conclusão da fase de lances em uma licitação se enquadra na literatura de negotiauctions.…”

Section: O Vai E Vem Do Valor De Reserva Secreto E O Instituto Da Neg...unclassified

Licitações com preço de reserva secreto e negociação: Uma análise de teoria dos leilões para o caso de valores privados

Bugarin

Portugal

2022

Estud. Econ.

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Resumo Este artigo compara diferentes mecanismos de contratação de uma obra ou serviço por meio de uma licitação. São consideradas a licitação simples sem preço de reserva, a licitação com preço de reserva anunciado, a licitação com preço de reserva secreto e, por fim, a licitação com preço de reserva secreto, mas com possibilidade de negociação ex post caso o vencedor tenha feito lance acima do preço de reserva. É adotada a hipótese de valores privados simétricos, independentes e identicamente distribuídos. A análise teórica e as simulações sugerem uma superioridade da inclusão de preços de reserva, sendo que anunciar publicamente o preço de reserva se mostra um mecanismo mais vantajoso se o preço de reserva for baixo, enquanto manter o preço de reserva secreto se mostra mais vantajoso se esse preço for elevado. Ademais, a inclusão da negociação no modelo de licitação com preço de reserva secreto induz um aumento nos lances dos participantes, majorando o custo final para o governo. No entanto, se o benefício social da obra ou serviço contratado for suficientemente maior que seu custo de reserva, então o mecanismo da negociação se torna vantajoso.

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“…The discrete cost structure and unknown bidding preference of suppliers would make the complex mechanism design problem more intractable. Although reverse auction mechanisms have been extensively investigated in theory [17], [41], [59], most of the existing works assumed that the bidding preference is known and the cost function is continuous. Hence, the mechanism design problem that considers the discrete cost structure and unknown bidding preference under asymmetric information in MARAs forms the main focus of the paper.…”

Section: Introductionmentioning

confidence: 99%

Mechanism Design of Unknown Bidding Preference and Discrete Cost Structure in Multi-Attribute Reverse Auctions

et al. 2019

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This paper studies a multi-attribute reverse auction in which one manufacturer/buyer purchases multi-unit identical components/goods from a group of capacity-constrained suppliers considering the procurement cost and delivery time. The unknown bidding preference and the discrete cost structure are particularly investigated. Constructing a bi-level distributed decision-making model, a novel iterative multi-attribute reverse auction mechanism embedding negotiation is proposed to improve the procurement efficiency under the decision-making framework. Specifically, in the upper level, the buyer determines the optimal allocation by solving the winner determination problem. To induce suppliers to adjust their delivery times, three guiding strategies are proposed, i.e., the guiding strategy based on the deviation of delivery time (GDD), the guiding strategy based on the deviation of objective function value (GDF), and the guiding strategy randomly based on the deviation of objective function value (GRDF). In the lower level, suppliers adopt the concession strategies for determining the bid price and delivery time in response to the buyer's feedback. The numerical experiments illustrate the effectiveness and applicability of the proposed mechanism by comparing it with the centralized model. When the buyer places higher importance on the procurement cost than on the delivery time, the GRDF achieves the best negotiation outcome; otherwise, the GDF is the buyer's best option. Also, the proposed mechanism is robust to the variance of suppliers' decision parameters and could be a useful procurement tool for the buyer. INDEX TERMS Bidding preference, bi-level distributed decision making, discrete cost structure, negotiation, multi-attribute reverse auction.

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NegotiAuction: An experimental study

Cited by 4 publications

References 39 publications

Multiattribute Procurement Auctions: Efficiency and Social Welfare in Theory and Practice

Multiattribute Procurement Auctions: Efficiency and Social Welfare in Theory and Practice

Licitações com preço de reserva secreto e negociação: Uma análise de teoria dos leilões para o caso de valores privados

Mechanism Design of Unknown Bidding Preference and Discrete Cost Structure in Multi-Attribute Reverse Auctions

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