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The multidimensional procurement auctions with reference‐based utility

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  • Zhe Chen

Abstract

In this paper, we modify standard multidimensional procurement auction models by the assumption of reference‐based utility. We analyze how the reference‐based utility of a buyer affects the outcomes of multidimensional procurement auctions. Furthermore, we also investigate the optimal reference‐based utility of a buyer and demonstrate that the multidimensional procurement auctions with reference‐based utility dominate several other commonly used procedures for buying differentiated products. Our results extend the standard analysis of multidimensional procurement auctions (e.g., Che, 1993; Asker & Cantillon, 2008) to more economically reasonable cases.

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  • Zhe Chen, 2021. "The multidimensional procurement auctions with reference‐based utility," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(2), pages 319-325, March.
    • Handle: RePEc:wly:mgtdec:v:42:y:2021:i:2:p:319-325
    DOI: 10.1002/mde.3237
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    References listed on IDEAS

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