Please use this identifier to cite or link to this item: https://doi.org/10.15480/882.4662
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Publisher DOI: 10.1111/j.1937-5956.2012.01365.x
Title: Reputation and mechanism choice in procurement auctions : an experiment
Language: English
Authors: Brosig-Koch, Jeannette 
Heinrich, Timo  
Keywords: auction choice; buyer-determined and price-based procurement; experimental economics; supplier reputation
Issue Date: 17-Aug-2012
Publisher: Wiley-Blackwell
Source: Production and Operations Management 23 (2): 210-220 (2014-02)
Abstract (english): 
We experimentally study the role of reputation in procurement using two common mechanisms: price-based and buyer-determined auctions. While buyers are bound to buy from the lowest bidder in price-based auctions, they can choose between bidders in buyer-determined auctions. Only the latter buyers can consider the reputation of bidders. We find that bidders supply higher quality in buyer-determined auctions leading to higher market efficiencies in these auctions. Accordingly, buyers prefer the buyer-determined auction over the price-based auction, while only half of the bidders do so. A more detailed analysis of buyers' and bidders' behavior and profits provides insights into their mechanism choice. © 2012 Production and Operations Management Society.
URI: http://hdl.handle.net/11420/9109
DOI: 10.15480/882.4662
ISSN: 1937-5956
Journal: Production and operations management 
Document Type: Article
License: In Copyright In Copyright
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