Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/327107 
Year of Publication: 
2025
Series/Report no.: 
ZEW Discussion Papers No. 25-039
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
We investigate how buyer-supplier communication affects procurement prices, comparing auctions without direct communication to negotiations allowing it. In controlled experiments involving students and procurement professionals, we find communication increases prices, disadvantaging buyers. Negotiation analyses show lower initial offers, negotiation-focused dialogue, and emphasizing competition help reduce prices. Contrary to conventional wisdom, auctions without communication often yield better procurement outcomes, especially in competitive markets. Our results suggest managers should reconsider assumptions about experienced negotiators achieving superior deals and instead favor procurement auctions with limited communication to secure lower prices.
Subjects: 
Auctions
Negotiations
Procurement
Experiment
JEL: 
D44
Document Type: 
Working Paper

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