Influence of tender type on seller participation

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JEL classification

• Auctions
• Business Administration: Other
• Business Economics

Keywords

English Reverse Auction, eProcurement, eSourcing, Mann–Whitney test, Sealed bids

Abstract

When announcing a tender, the buyer decides on its setting, which includes its type. In practice, the most widespread types of tenders are sealed bids and English reverse auctions. The two types have different settings and thus affect the seller behaviour in the tender. One of these is the participation in the entry round. It is possible to assume that the seller participation in the entering round of English reverse auctions, in which sellers receive some market in-formation, is higher than that in sealed bids, in which sellers gain no market information. The aim of the paper is to verify the above-mentioned assumption of seller participation in the entering round of sealed bids and English reverse auctions. The research was carried out on a sample of 1077 sealed bids and 3083 English reverse auctions. The result of statistical testing using the Mann–Whitney test is that the type of tender has an effect on the seller participation in the entering round at the 5% level of significance. A comparison of average seller participation in the entering round in sealed bids and English reverse auctions confirms the above-mentioned assumption.