The effect of asymmetric bidder size on an auction's performance: Are more bidders always better?

• 成果类型: Article
• 署名作者: Elmaghraby, W
• 署名单位: University System of Maryland; University of Maryland College Park
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.1050.0432
• 发表日期: 2005
• 页码: 1763-1776
• 关键词: sequential auctions; procurement; synergies; Asymmetric bidders

摘要

One commonly held belief in designing auctions is that increasing the number of bidders makes an auction more competitive. Therefore a buyer who wishes to minimize her procurement costs is better off inviting more suppliers to participate. In this paper, we question the validity of this belief by shedding light on bidders' behavior when bidders experience economies of scale in production and differ in their production capacity. We consider a setting with two different sized bidders, global and small. We assume that global bidders have a large production capacity (can win in more than one auction) and experience economies of scale in production, whereas small bidders can win in at most one auction. In this new setting, we focus on the impact of allowing both global and small suppliers to compete against each other on the performance of an auction.