Abstract

Successful e-procurement depends on selecting the appropriate mechanisms that comprise rules governing and facilitating transaction process. Existing mechanisms have theoretical or practical limitations such as limited number of attributes, disclosure of buyer’s preferences and costly processes. The present research addresses these issues through three studies. Study 1 presents two feasible mechanisms for multi-attribute multi-supplier transactions. They allow buyers to control preference representation and information revelation, assuring that suppliers obtain sufficient information in making effective proposals while protecting confidential information. Following the design-science approach, the mechanisms are implemented to support multi-attribute reverse auctions and multi-bilateral negotiations. Study 2 examines the revelation of information in multi-attribute reverse auctions. Three revelation rules are formulated with admissible bids, winning bids and all bidders’ bids. Their effects on the process, outcomes and bidders’ assessment are tested in two experiments. The results show significant improvement in process efficiency when more information is revealed. The suppliers reached better outcomes with either admissible bids only or all bidders’ bids, while the buyers gained more when revealing the winning bids only. Bidders were more satisfied with the outcomes and system when more information was provided. Study 3 compares multi-attribute reverse auctions and multi-bilateral negotiations in both laboratory and online experiments. The results show that auctions are more efficient than negotiations in terms of the process. Auctions led to greater gains for the buyers, whereas more balanced contracts were reached in negotiations. Suppliers’ assessment was affected by their outcomes, and the winning suppliers were more satisfied with the process, outcomes and system. The buyer’s role was also examined. Different types of information conveyed from buyer influence suppliers’ behavior in making bids/offers and concessions, which in turn affected buyer’s gains.
This research provides implications to future studies and practices in e-procurement, in particular, the formulation of a procedure of two multi-attribute mechanisms and the formulation of general guidelines for strategic use of different mechanisms in various e-procurement contexts.