Sequential procurement auctions

Sequential Procurement Auctions

Procurement by governments accounts for 10-15 percent of national product in most Western nations [McAfee and McMillan (1985a)]. Consequently, analyses of procurement policies apply to a significant portion of economic activity. This paper considers sequential procurement: a buyer will purchase items in sequence, with costs correlated across time. Thus, if auctions are held, bids in the first a...

On optimal bidding in sequential procurement auctions

We investigate the problem of optimal bidding for a firm that in each period procures items to meet a random demand by participating in a finite sequence of auctions. We develop a new model for a firm where its item valuation derives from the sale of the acquired items via their demand distribution, sale price, acquisition cost, salvage value and lost sales. We establish monotonicity properties...

Optimal Bidding in Sequential Procurement Auctions

We consider the problem of a firm that in each period procures items by participating in auctions and then it sells the acquired items by the end of the period, where any unsold items are salvaged. The objective of the firm is to have a bidding policy that maximizes the expected value of its profit over N auctions. In this model the firm’s valuations derive from the resale of acquired items via...

Repeated Procurement Auctions

Industrial Procurement Auctions

As illustrated in the previous chapters, combinatorial auctions have successfully been applied to various application domains, such as the allocation of airspace system resources (Chapter 20), truckload transportation (Chapter 21) and bus routes (Chapter 22). Industrial procurement is potentially a huge application domain for combinatorial auctions, and it has turned into a topic of interest fo...