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Metrics for Managing Online Procurement Auctions

Author

Listed:
  • Ido Millet

    (Penn State Erie, Black School of Business, Erie, Pennsylvania 16563-1400)

  • Diane H. Parente

    (Penn State Erie, Black School of Business, Erie, Pennsylvania 16563-1400)

  • John L. Fizel

    (Penn State Erie, Black School of Business, Erie, Pennsylvania 16563-1400)

  • Ray R. Venkataraman

    (Penn State Erie, Black School of Business, Erie, Pennsylvania 16563-1400)

Abstract

Metrics can improve firms' ability to manage online procurement auctions. A key factor in business-to-business procurement auctions is supplier participation, which we modeled as a multistage process. We analyzed data collected from thousands of auctions conducted by a large multinational firm and found that different auction types lead to different participation and success dynamics. Typically, it is important to invite a sufficient number of suppliers and ensure that they accept the invitation and actually log into the auction. It is even more important to encourage active bidding and reduce the proportion of suppliers who log in but never bid.

Suggested Citation

  • Ido Millet & Diane H. Parente & John L. Fizel & Ray R. Venkataraman, 2004. "Metrics for Managing Online Procurement Auctions," Interfaces, INFORMS, vol. 34(3), pages 171-179, June.
    • Handle: RePEc:inm:orinte:v:34:y:2004:i:3:p:171-179
    DOI: 10.1287/inte.1040.0073
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    References listed on IDEAS

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    1. Brannman, Lance & Klein, J Douglass & Weiss, Leonard W, 1987. "The Price Effects of Increased Competition in Auction Markets," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 24-32, February.
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    3. Pinar Keskinocak & Shidhar Tayur, 2001. "Quantitative Analysis for Internet-Enabled Supply Chains," Interfaces, INFORMS, vol. 31(2), pages 70-89, April.
    4. McAfee, R Preston & McMillan, John, 1987. "Auctions and Bidding," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 699-738, June.
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    Citations

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    Cited by:

    1. Juraj Nemec & Matúš Grega & Mária Horehájová & Matúš Kubák, 2020. "Efficiency of Public Procurement in the Slovak Health Care [Efektívnosť verejného obstarávania v slovenskom zdravotníctve]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2020(1), pages 27-39.
    2. Beata GAVUROVA & Andrea TKACOVA & David TUCEK, 2017. "Determinants of Public Fund´s Savings Formation via Public Procurement Process," REVISTA ADMINISTRATIE SI MANAGEMENT PUBLIC, Faculty of Administration and Public Management, Academy of Economic Studies, Bucharest, Romania, vol. 2017(28), pages 25-44, June.
    3. Zhijuan Hong & Ruhai Wu & Yan Sun & Kunxiang Dong, 2020. "Buyer preferences for auction pricing rules in online outsourcing markets: fixed price vs. open price," Electronic Markets, Springer;IIM University of St. Gallen, vol. 30(1), pages 163-179, March.
    4. Ernan Haruvy & Peter Popkowski Leszczyc & Octavian Carare & James Cox & Eric Greenleaf & Wolfgang Jank & Sandy Jap & Young-Hoon Park & Michael Rothkopf, 2008. "Competition between auctions," Marketing Letters, Springer, vol. 19(3), pages 431-448, December.
    5. Yili Hong & Chong (Alex) Wang & Paul A. Pavlou, 2016. "Comparing Open and Sealed Bid Auctions: Evidence from Online Labor Markets," Information Systems Research, INFORMS, vol. 27(1), pages 49-69, March.
    6. Hur, Daesik & Mabert, Vincent A. & Hartley, Janet L., 2007. "Getting the most out of reverse e-auction investment," Omega, Elsevier, vol. 35(4), pages 403-416, August.
    7. Radovan Dráb & Tomáš Štofa & Radoslav Delina, 2022. "Analysis of the efficiency of electronic reverse auction settings: big data evidence," Electronic Commerce Research, Springer, vol. 22(2), pages 427-450, June.
    8. Juraj Nemec & Matus Grega & Marta Orviska, 2020. "Over-bureaucratisation in public procurement: purposes and results," Public Sector Economics, Institute of Public Finance, vol. 44(2), pages 251-263.
    9. Alok Gupta & Stephen Parente & Pallab Sanyal, 2012. "Competitive bidding for health insurance contracts: lessons from the online HMO auctions," International Journal of Health Economics and Management, Springer, vol. 12(4), pages 303-322, December.
    10. Radoslav Delina & Renata Olejarova & Petr Doucek, 2023. "Effect of a new potential supplier on business to business negotiations performance: evidence-based analysis," Electronic Commerce Research, Springer, vol. 23(3), pages 1941-1970, September.
    11. Beata GAVUROVA & David TUCEK & Andrea TKACOVA & Jakub DANKO, 2018. "Public Procurement Efficiency In Agriculture And Forestry In Slovakia," REVISTA ADMINISTRATIE SI MANAGEMENT PUBLIC, Faculty of Administration and Public Management, Academy of Economic Studies, Bucharest, Romania, vol. 2018(30), pages 24-36, June.
    12. Kevin Yili Hong & Alex Chong Wang & Paul A. Pavlou, 2013. "How does Bid Visibility Matter in Buyer-Determined Auctions? Comparing Open and Sealed Bid Auctions in Online Labor Markets," Working Papers 13-05, NET Institute.

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