Push or Pull? Auctioning Supply Contracts

• 成果类型: Article
• 署名作者: Li, Cuihong; Scheller-Wolf, Alan
• 署名单位: University of Connecticut; Carnegie Mellon University
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/j.1937-5956.2010.01174.x
• 发表日期: 2011
• 页码: 198-213
• 关键词: price; INVESTMENT; COMMITMENT; chain

摘要

Consider a buyer, facing uncertain demand, who sources from multiple suppliers via online procurement auctions (open descending price-only auctions). The suppliers have heterogeneous production costs, which are private information, and the winning supplier has to invest in production capacity before the demand uncertainty is resolved. The buyer chooses to offer a push or pull contract, for which the single price and winning supplier are determined via the auction. We show that, with a pull contract, the buyer does not necessarily benefit from a larger number of suppliers participating in the auction, due to the negative effect of supplier competition on the incentive of supplier capacity investment. We thus propose an enhanced pull mechanism that mitigates this effect with a floor price. We then analyze and compare the outcomes of auctions for push and (enhanced) pull contracts, establishing when one form is preferred over the other based on the buyer's profits. We also compare our simple, price-only push and pull contract auctions to the optimal mechanisms, benchmarking the performance of the simple mechanisms as well as establishing the relative importance of auction design and contract design in procurement auctions.