Business to business electronic commerce issues and solutions
Decision Support Systems - Special issue for business to business electronic commerce, issues and solutions
On cheating in sealed-bid auctions
Decision Support Systems - Special issue: The fourth ACM conference on electronic commerce
Bidding in sealed-bid and English multi-attribute auctions
Decision Support Systems
Performance of the Vickrey auction for digital goods under various bid distributions
Performance Evaluation
A rank-and-compare algorithm to detect abnormally low bids in procurement auctions
Electronic Commerce Research and Applications
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Procurement auctions may be affected by abnormally low bids, whose acceptance may have negative consequences on the auctioneer. A method, based on the average submitted bid, is considered to detect such anomalous bids and aid the auctioneer in the possible rejection decision. Analytical expressions or simulation results are provided for the detection probability and for the false alarm probability. The performances heavily depend on the number of tenderers and on the dispersion of bid values. Both performance indices improve as the number of tenderers grows and generally degrade as the dispersion grows. The presence of multiple anomalous bids leads to a significant worsening of the performance, while courtesy bids raise both the false alarm probability and the detection probability. The use of the average-bid criterion, though officially endorsed in national legislations, is therefore recommended as a strongly precautionary criterion, i.e. when the need to avoid anomalous bids is considered much more relevant than the costs associated to deeper investigation of anomalous bids or to the erroneous rejection of regular bids.