Electronic Reverse Auctions and the Public Sector – Factors of Success

Abstract:     
Electronic reverse auctions (e-RAs) provide purchasers with an opportunity for greater saving, transparency and administrative benefits. This paper reviews the literature, identifying the factors relevant to public sector e-RA success, and then tests these factors through a statistical analysis of a large sample of e-RAs, with a view towards providing guidance to public sector purchasers looking to conduct e-RAs. Our research found no correlation between e-RA success and the number of bidders or auction volume, but correlation between e-RA success and each of competition among suppliers, purchase complexity and purchase specification. The number of bidders was found to be correlated with competition among suppliers, specification and complexity. Auction volume was found to be correlated with none of the factors. We discuss the possible explanations for our results and draw conclusions for public sector procurement managers to consider when deciding whether to conduct an e-RA for a particular purchase.

Number of Pages in PDF File: 25

Keywords: Electronic reverse auctions, e-RA, public sector, public sector procurement, moshe shalev, stee asbjornsen, moshe eitan shalev, uniten nations

JEL Classification: H4

Accepted Paper Series