Multiple‐Winner Award Rules in Online Procurement Auctions

Qi Wang (First Author), Xuping Jiang (Participant Author), Jinhong Xie (Participant Author), Juan Feng (Participant Author)

科研成果: 期刊稿件期刊论文

摘要

This study investigates a novel mechanism—multiple‐winner award rules—that are widely used in e‐procurement auctions and crowdsourcing sites. In many e‐procurement auctions, the auctioneer (i.e., the buyer) specifies three rules before the auction starts: (i) the size of the finalist set (from which the winner[s] will be chosen); (ii) the number of winners; and (iii) the allocation of the contract among the winners. We examine how these three rules affect auction performance using a dataset of online procurement auctions across a variety of product categories. We find that the multiple‐winner award rules significantly impact the suppliers’ participation decisions, which is an important factor in determining the economic performance of the auction (i.e., buyer's savings). Most interestingly, these three rules systematically induce opposite effects on auction participation for two types of suppliers: experienced and inexperienced bidders. For example, increasing the number of winners encourages experienced suppliers, but discourages inexperienced suppliers from participating in the auction. On the other hand, raising the disparity in the contract allocation among winning bidders (e.g., from 50/50 to 90/10 split) deters experienced suppliers, but motivates inexperienced suppliers to participate. These findings provide guidelines for industrial buyers and crowdsourcing hosts on how to effectively make use of multiple‐winner design levers to promote suppliers’ participation when designing procurement auctions and crowdsourcing contests.
源语言英语
页(从-至)2533-2551
期刊Production and Operations Management
28
10
DOI
出版状态已出版 - 2019

Corresponding author email

juafeng@cityu.edu.hk

Project name

Hong Kong Research Grants Council

Project sponsor

其他

Project No.

11500216;;11501414;;11507218

关键词

  • auction desig
  • award allocation
  • industrial procurement
  • multiple winners
  • online auctions

成果物的来源

  • ABDC-A
  • Scopus

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