Game theory Online exchanges

Supplier competition iscr tiple r bu each supplier randomizes its price and the lower bound of the price range is determined by the highest marginal cost. In addition, the supplier with a lower marginal cost has a larger considered pricing space rmatio ation. A ore an usually composed of one buying firm and many suppliers, is one of the popular exchange mechanisms helping business buyers pro-cure better contract terms and prices for the goods and services they purchase. In online procurement auctions, buyers host the on-ter to the demand, followed by the supplier with the second-low-est bid price, and so on, until the demand is satisfied. Through the mechanism of reverse auctions implemented on the B2B exchange portal, a buyer can select the best offer in a time bound manner, and suppliers can lower the cost for selling and marketing. A series of studies have been conducted by them to provide a theoretical basis for understanding the effect of costs and capacities on B2B exchanges (Bandyopadhyay et al., 2006, 2008). Procurement auc-tions usually involve a sealed bid due to difficult bid evaluatio