Research On Mechanism Design Of Electronic Reverse Auction

With the development of the e-business, electronic reverse auction (ERA), a main kind of the e-business, has attracted more and more People’s attention. In fact, ERA is new procurement mechanism. There are many merits in this mechanism. It can enlarge the range of the suppliers who can participate in the procurement. And at the same time, competition emotions of the suppliers can be excited to a large extent. As a result, the suppliers will reduce their prices colonially. ERA is gradually becoming the inevitable choice of the procurement of government and companies. But, because of its novelty and complexity and without enough practical and theoretical experience, ERA has not been widely used. Although many companies have tried this method to purchase, they can’t gain the expected results of the experiment. Therefore, the research of the mechanism of ERA is significant from the theoretical and practical aspects.This article summarizes the previous theory first, including auction theory, reverse auction theory and mechanism theory, and then uses the centralized decision making method and distributed decision making method to make a detailed research on the mechanism design of ERA. The content is as following:Firstly, we sum up the auction theory, reverse auction theory and mechanism design theory. Through the summary, we know the research hotspots currently and find out the existing problem. Then we fix our breakthrough point.Secondly, the centralized decision making method is used to make a detail research on the reverse auction with the information of the supplier’s costs unfolded. Under this circumstance, the auctioneer knows the whole information of the supplier’s costs. So he just needs to make a centralized decision to select the suppliers and distribute the quantity. This problem is a optimization problem in fact, and we usually call it winner determination problem (WDP). In the article, we make the research under the different kind of suppliers. In fact, the aim of this part is to provide a contrast for the following part rather than investigate the WDP. At last, the distributed decision making method is used to make a detail research on the reverse auction with the information of the supplier’s costs folded. Under this circumstance, the information of the supplier’s costs is only known to themselves. Nobody else can gain the information. So the main task of this part is to help auctioneer to design a rational mechanism to lead the supplies to reduce their supply price. In the article, we present the selection and distribution strategies of up-level decision maker and bidding strategies of down-level decision maker. After that, we do the numerical experiments. Through the experiments, we discover the problem of the strategies. With the help of theoretical analysis, we find out the reason of the problem and raise a new improved mechanism. Finally, we do the numerical experiments, theoretical analysis and parametric analysis, and illustrate the rationality of the improved mechanism.The mechanism design of ERA is studied in this article, and at last an efficient method is supplied for the implement of ERA in our lives.