An interactive approach for multi-attribute auctions

Karakaya, Gülşah; Köksalan, Murat

doi:10.1016/j.dss.2010.11.023

Cited by 26 publications

(18 citation statements)

References 12 publications

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“…It should be noted that multiattribute mechanisms that do not depend on this assumption have been proposed (e.g., Sandholm 2007, Bellosta et al 2008, Karakaya and Köksalan 2011, Adomavicius et al 2012. Approaches that use decision-analytic methods (e.g., multiattribute utility theory, analytic hierarchy process, ELECTRE, SMART) for the construction of market participants' utilities allow for interdependencies and trade-offs between all attributes, including price (Bichler and Kalagnanam 2005, Kameshwaran et al 2007, Gwebu 2009).…”

Section: Multiattribute Auctionsmentioning

confidence: 98%

Multiattribute Procurement Auctions: Efficiency and Social Welfare in Theory and Practice

Kersten

2014

Decision Analysis

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To cite this article: Gregory E. Kersten (2014) Multiattribute Procurement Auctions: Efficiency and Social Welfare in Theory and Practice. Decision Analysis 11(4):215-232. http://dx.O ne of the standard assumptions in auction theory is that preferences can be represented with quasilinear utility. This assumption is of particular significance in reverse auctions, which are used in procurement. This paper presents an analysis of quasilinear utilities and their implications. Building on observations of scholars in economics and decision sciences, who note that quasilinear preferences may be rare in practice, the paper shows that in the procurement of goods and services, price is often interrelated with costs. When preferences can be represented with convex or concave utilities, the alternatives in which the buyer's surplus is maximized are different from those that maximize social welfare. The result is that reverse auctions may cause a significant loss of social welfare, which is of particular significance for public organizations. The analysis of concave efficient frontiers in the utility space shows that it is possible to determine deals that yield greater social welfare than the winning bids. If the winning seller is willing to share the increase in utility with the buyer who faces a loss, then these alternatives can produce, for both the buyer and the seller, utility values that are higher than the utility values produced by the winning bid.

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Section: Multiattribute Auctionsmentioning

confidence: 98%

Multiattribute Procurement Auctions: Efficiency and Social Welfare in Theory and Practice

Kersten

2014

Decision Analysis

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“…Bellosta et al proposed a multiple criteria English reverse auction mechanism based on reference points. Also, Karasakaya & Ki:iksalan [10] indicate that it's difficult to determine criteria or transmit multi-attribute value into composite value for decision. In multi-unit aspect, Talluri et al…”

Section: A Multi-attribute Auctionmentioning

confidence: 99%

A multi-objective decision support mechanism for reverse auction

Shih

2014

2014 9th International Conference on Computer Science &Amp; Education

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Online auctions have becoming the most popular forms of trading on Internet. Companies have a need to provide a decision support tool that help buyer to deal with the reverse auction from suppliers. Therefore, a multi-objective decision support mechanism for reverse auction is proposed in this study.A DEA model by considering both buyers and sellers' preference that optimizes their efficiency are proposed. Each seller may revise their own bid according to suggested adjustment from our proposed decision support mechanism.

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“…Although we consider this limited articulation of preferences to be unlike the difficulties in e.g. expressing aspiration points in multi-criteria models as discussed in [17], we recognize that expressing z P is associated with a cost and leave it for future research to find a way to avoid such preference information a priori. As an example, a principal who lacks information about high quality may exclude bids, but in practice such cases will occur with very low probability; and if it does happen, the principal can adjust his reservation quality and price over time when/if the auction is repeated.…”

Section: The Yardstick Pricesmentioning

confidence: 99%

A Sealed-Bid Two-Attribute Yardstick Auction Without Prior Scoring

2015

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We analyze a two-attribute single item procurement auction that uses yardstick competition to settle prices. The auction simplifies the procurement process by reducing the principal's articulation of preferences to simply choosing the most preferred offer as if it was a market with posted prices. This is done simply by replacing the submitted sealed bids by yardstick bids, computed by a linear weighting of the other participants' bids.We show that there is only one type of Nash equilibria where some agents may win the auction by submitting a zero price-bid. Using a simulation study we demonstrate that following this type of equilibrium behavior often leads to winner's curse. The simulations show that in auctions with more than 12 participants the chance of facing winner's curse is around 95%.Truthful reporting, on the other hand, does not constitute a Nash equilibrium but it is ex post individually rational. Using a simulation study we demonstrate that truthful bidding may indeed represent some kind of

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An interactive approach for multi-attribute auctions

Cited by 26 publications

References 12 publications

Multiattribute Procurement Auctions: Efficiency and Social Welfare in Theory and Practice

Multiattribute Procurement Auctions: Efficiency and Social Welfare in Theory and Practice

A multi-objective decision support mechanism for reverse auction

A Sealed-Bid Two-Attribute Yardstick Auction Without Prior Scoring

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