University of Twente Student Theses
Strategic relevance and application of the mechanism design theory at the example of selected European private procurement auctions in a B2B-context
Creutzmann, J.B. (2021) Strategic relevance and application of the mechanism design theory at the example of selected European private procurement auctions in a B2B-context.
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| Abstract: | Mechanism Design Theory (MDT) is a game-theoretical approach applied in negotiations and illustrates the conventional game theory's inverse. Hence, Mechanism Design Theory is limitedly spread within the industry since the strategic relevance and application are not well known by experts within the selected industries. Thus, the question arises of what describes the use case of the approach, what are its benefits and limitations, and if possible, how alternative methods and strategies can overcome limitations. The purpose of the research shall serve to work further on the knowledge gap about this tool to receive more detailed insights on its applicability and understanding in various industry sectors. With this, qualitative research, conducted as semi-structured interviews with eight experts with negotiation and procurement expertise, has been executed to find out more about the priorly listed aspects. Results illustrate that using Mechanism Design is differently understood among the experts in the industry and thus differently applied. In general, Mechanism Design Theory describes the ability to design the negotiation and process rather than consider the opponent's step. One significant aspect of the research is that a mechanistic tool, known as Bonus-Malus appraisal, can be applied with a heavy cost-engineering focus (called dirty by experts). Differently, it can be applied with an honest intention for achieving comparability among the auction participants (called clean by experts) and is further understood as to how a negotiation setting is designed. According to the interviewees, both approaches, clean and dirty, influence the negotiation outcome enormously. Nevertheless, future research needs to be conducted to focus on a detailed case-specific analysis to derive a more apparent practical application. |
| Item Type: | Essay (Bachelor) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 85 business administration, organizational science |
| Programme: | International Business Administration BSc (50952) |
| Link to this item: | https://purl.utwente.nl/essays/86462 |
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