An Empirical Exploration of Multi-Attribute Bidding: Redefining Intermediary Roles in Electronic Markets

The vast majority of electronic markets have been based purely on a single variable (price) as the factor that determines ‘the winner’. Multi-attribute auctions are likely to be more appropriate for procurement scenarios where factors other than price need to be considered in determining the outcome. Nevertheless, there is a scarcity of empirical research on multi-attribute electronic auctions. In particular, there is little empirical evidence of how multi-attribute auctions fit with our theoretical conceptualisation of electronic markets. This paper uses the market design aspects of multi-attribute auctions to explore a multivariable electronic auction, using frameworks from electronic market process design and systematic sourcing. Evidence from the case study illustrates that multi-variable electronic auctions can be used to procure a wider range of operating and manufacturing input that has been considered possible with traditional, price only, auctions. The findings reveal how the use of an electronic auction intermediary creates a middle ground of interaction between spot and systematic sourcing, by automating for the buyer certain general parameters and trade context processes.