Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/112907 
Year of Publication: 
2015
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2015: Ökonomische Entwicklung - Theorie und Politik - Session: Procurement No. F14-V1
Publisher: 
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
Abstract: 
We investigate the claim that auctions in procurement are detrimental to the buyer- seller relationship, which is expressed by less trust by the buyer and more oppor- tunistic behavior by the supplier after the sourcing. To do so, we compare exper- imentally a standard auction and a buyer-determined auction. It turns out that buyer-determined auctions result in higher prices but enable cooperation between the buyer and the selected supplier. In the buyer-determined auction it can be optimal for the buyer to choose the larger offer. The standard auctions, on the other hand, yield lower prices but reduce cooperation to a minimum. Interest- ingly the degree of trust reflected by a larger number of trades and efficiency in case of trade are significantly higher in the buyer-determined auction. Theoretical reasoning based on other-regarding preferences helps to organize the results.
JEL: 
D44
D03
D02
Document Type: 
Conference Paper

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