This paper presents a comparison mechanism for a simple procurement auction and generalized Nash bargaining solution in a procurement circumstance. The buyer who hopes to fulfill a project has two options. First, she ...This paper presents a comparison mechanism for a simple procurement auction and generalized Nash bargaining solution in a procurement circumstance. The buyer who hopes to fulfill a project has two options. First, she may award the project to the old provider with an efficient quality by bargaining Second, she may give the project to the firm who submits the lowest bid through a simple procurement second-price sealed-bid auction with a pre-fixed quality. We compare the expected revenue in the auction with the deterministic profit of the bargaining. In different parameters cases, we find the borderline functions between the two options with respect to the buyer＇s bargaining power and the amount of bidders. We also compare our simple procurement auction （SPA） with the optimal multidimensional bid auction by Che （1993）, and find our model protects the buyer＇s private valuation information by forfeiting some profits. Some properties of the difference between the two auctions are proposed, especially there is no revenue difference when the amount of bidders approaches infinity.展开更多
In this paper, the processes to determine winning probability for the corresponding bidder's deterministic bid are presented. The analysis of the winning probability is crucial for studying the bidding equilibria ...In this paper, the processes to determine winning probability for the corresponding bidder's deterministic bid are presented. The analysis of the winning probability is crucial for studying the bidding equilibria and designing the mechanism of procurement combinational auctions (CAs), and it also provides the decision making support for bidders who are in commercial synergies surrounding. Finally, an example is used to illustrate the feasibility and detailed processes of calculating winning probability.展开更多
基金supported by National Natural Science Foundation of China under Grant No. 70701040
文摘This paper presents a comparison mechanism for a simple procurement auction and generalized Nash bargaining solution in a procurement circumstance. The buyer who hopes to fulfill a project has two options. First, she may award the project to the old provider with an efficient quality by bargaining Second, she may give the project to the firm who submits the lowest bid through a simple procurement second-price sealed-bid auction with a pre-fixed quality. We compare the expected revenue in the auction with the deterministic profit of the bargaining. In different parameters cases, we find the borderline functions between the two options with respect to the buyer＇s bargaining power and the amount of bidders. We also compare our simple procurement auction （SPA） with the optimal multidimensional bid auction by Che （1993）, and find our model protects the buyer＇s private valuation information by forfeiting some profits. Some properties of the difference between the two auctions are proposed, especially there is no revenue difference when the amount of bidders approaches infinity.
基金Supported by the National Natural Science Foundation of China (No.70231010 and No.70321001)
文摘In this paper, the processes to determine winning probability for the corresponding bidder's deterministic bid are presented. The analysis of the winning probability is crucial for studying the bidding equilibria and designing the mechanism of procurement combinational auctions (CAs), and it also provides the decision making support for bidders who are in commercial synergies surrounding. Finally, an example is used to illustrate the feasibility and detailed processes of calculating winning probability.
