Design and implementation of a brokerage service for electronic procurement

Abstract

The paper describes design and implementation of a brokerage service for electronic procurement. We concentrate on the negotiation phase during the market transaction, as current electronic procurement systems do not support this phase appropriately. First, we describe generic market structures from a microeconomic point of view to provide context. Based on this classification we focus on heterogeneous monopsonies, a structure which is quite common in corporate procurement. As negotiation on multiple attributes of a deal is crucial in these markets, we introduce multi-attribute auctions as a resource allocation mechanism for heterogeneous monopsonies. Then we describe design and implementation of the main components of a brokerage service for multi-attribute auctions.