In this paper, we run a laboratory experiment to compare two mechanisms in a procurement setting: Right-of-First-Refusal (ROFR) where the incumbent supplier is granted a privileged position versus standard First-Price-Auction (FPA). To this end, we have subjects compete against a computerized...

Motivated by the wholesale electricity auctions, this dissertation studies a series of unit-price procurement models, with a focus on the impacts of suppliers’ capacity constraints and system uncertainties. We first analyze a basic model with symmetric bidders and symmetric information. The...

The average US manufacturer spends 40-60% of its revenue to procure goods and services. Transcending its more tactical beginnings in vertically integrated firms, today the procurement function serves as a vital gatekeeper to low-cost and low-risk inputs for a firm. Strategic procurement involves...

This paper considers the auctioning of an indivisible project among several suppliers who hold private information about their own efficiency type. Both quality and price need to be determined. Different from scoring auctions, we present a new method, i.e., contingent payment auction mechanism...

Auctions have been used in several formats in the electric energy industry. In general, regulators may be uncomfortable initiating a reverse auction at a higher-than-expected final price, fearing that participants may sell their energy at an excess profitability. Nevertheless, evidence from...

We propose a new procurement procedure that allocates shares of the total amount to be procured depending on the bids of suppliers. Among the properties of the mechanism are the following: (i) Bidders have an incentive to participate in the procurement procedure, as equilibrium payoffs are...