Muti-attributes Two-stage Procurement Mechanism Design Based On Auction-renegotitation

Bargaining is very important; it is an inevitable stage in practical operations. Bargaining can improve the previous "contract" pre-allocation efficiency. Under the framework of game theory, two-stage (or more) mechanism can improve the efficiency and reduce the cost of decision-making in the following stage by selecting few (potential) winners from many competitors in the first stage. So it has important practical significance and theoretical value. In practical complex procurement operations, the buyer often selects suppliers by auction and then conduct negotiation with the winner in its quality and price. Considering the existence of multi-attributes and multi-stage in practical complex procurement operations, we design a two-stage mechanism for more efficient and practical procurement operations in one-item and multi-item procurement situation, which implements first multi-attributes auction then bargaining.Main novelty of the one-item multi-attributes two-stage mechanism is that we focus on three characteristics of practical procurement: both bidding and bargaining for price and qualities, both buyer and seller's information revelation problem, and time cost problem with corresponding strategies construction. We show that, in the one- item multi-attributes two-stage mechanism the auction stage holds MBR (Myopic Best Response) incentive compatible for buyer and sellers. Also, allocation outcome on equilibrium path and its relationship with buyer and seller's real valuation is presented. Bargaining stage improves the efficiency of auction stage, especially, we show there exist Nash-Bayesian equilibrium strategies and corresponding beliefs for both players in the one- item multi-attributes two-stage mechanism.A two-stage mechanism for more efficient and practical combinatorial procurement operations is designed in multi-item procurement situation, which implements first combinatorial auction then renegotiation. The multi-attributes two-stage mechanism in multi-item procurement situation, deals with price-quality competition and suppliers'(buyer's) information revelation problem severely. The paper shows that the multi-item multi-attributes two-stage mechanism holds incentive compatible and individual rationality in the auction stage; three criteria for the renegotiation function are presented, and monopolistic-bargaining and Nash-bargaining functions satisfied these criteria are designed for enterprise procurement and government procurement respectively. Especially, under all parties'individual rationality, the renegotiation allocation improves the efficiency of pre-allocation from auction.