Abstract

During the last decade, we have witnessed the rapid development of e-commerce, which has provided opportunities for organizations to facilitate transactions, improve trade efficiency, create competitive advantage, and reduce related costs through online transactions. Various kinds of market mechanisms, such as auction, catalogue and bargaining, can be used in these interactions. The growth of e-commerce stimulates design of electronic marketplaces and market mechanisms. We therefore need to study the differences in mechanism usage and their possible impact on users and transactions. This study compares negotiations and auctions, two principal market mechanisms, to develop a deeper understanding of their similarities and differences in e-market. The expectation is that the study will expand e-commerce knowledge to ensure the appropriate use of market mechanisms, which will further increase social welfare and better satisfy the agents with improved online transaction experiences. Empirical testing of the entire effective sample shows that participants in e-marketplaces are driven by the goal of own utility maximization. The amount of utility that participants gain positively impacts three types of satisfaction (i.e., satisfaction with outcome, self-performance, and process). Also, no significant effect attributed to differing mechanisms is found in economic measures or agents' satisfaction. Looking only at the winners (i.e. a sub-sample group), utility also has a significantly positive effect on participants' satisfaction. Gender as an individual characteristic is found to have a significant effect on the winners' satisfaction with outcome and self-performance. Non-winners' satisfaction with outcome is also significantly affected by mechanism type