IDEAS home Printed from https://ideas.repec.org/p/zbw/zewdip/327107.html
   My bibliography  Save this paper

Auctions vs. negotiations: The role of communication in an experiment with procurement managers

Author

Listed:
  • Fugger, Nicolas
  • Gillen, Philippe
  • Gretschko, Vitali
  • Kokott, Gian-Marco
  • Riehm, Tobias

Abstract

We investigate how buyer-supplier communication affects procurement prices, comparing auctions without direct communication to negotiations allowing it. In controlled experiments involving students and procurement professionals, we find communication increases prices, disadvantaging buyers. Negotiation analyses show lower initial offers, negotiation-focused dialogue, and emphasizing competition help reduce prices. Contrary to conventional wisdom, auctions without communication often yield better procurement outcomes, especially in competitive markets. Our results suggest managers should reconsider assumptions about experienced negotiators achieving superior deals and instead favor procurement auctions with limited communication to secure lower prices.

Suggested Citation

  • Fugger, Nicolas & Gillen, Philippe & Gretschko, Vitali & Kokott, Gian-Marco & Riehm, Tobias, 2025. "Auctions vs. negotiations: The role of communication in an experiment with procurement managers," ZEW Discussion Papers 25-039, ZEW - Leibniz Centre for European Economic Research.
  • Handle: RePEc:zbw:zewdip:327107
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/327107/1/1936353555.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:327107. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zemande.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.