An Evolutionary Game Theoretic Perspective on Online Reverse Auctions

This paper focuses on integrating of reverse auctions into the ongoing operation of firms and forming a long-term cooperative relationships between the suppliers and the buyers. Based on the theory of evolutionary economics and the game theory, we present the construction of the evolutionary game model in online reverse auctions. For illustration, an evolutionary phase diagram is utilized to show the effective of the model in analyzing the influential factors of the supply chain stability. Analytic results show that the buyers might promote supply chain integration by relatively increasing the fixed costs of bidding, giving some investments to the suppliers, and qualifying the multiple criteria of the suppliers. Besides, the marketing regulator should establish a punishment mechanism to prevent the opportunists from entering the ORA marketing. Those results can guard and lead the participants of reverse auctions, and inspire the buyers to design a more efficiency mechanism.