ABSTRACT
Contents 7.1 Introduction ................................................................................. 121 7.2 Literature Review ........................................................................... 123 7.3 Types of Auctions .......................................................................... 124
7.3.1 Double Auctions ................................................................ 125 7.3.2 A Statistical Formulation of Price Theory .............................. 126
7.3.2.1 The Market Price Statistic ...................................... 126 7.3.3 Market Structure Affects the Market Price Statistic ................. 127 7.3.4 Theoretical and Managerial Implications ............................... 128
7.4 Research Implications and Conclusion ............................................. 129 References .............................................................................................. 130
7.1 Introduction The role that supply management plays in organizations can have a direct impact on firm performance, especially in the area of cost reduction. Advances in information technology, namely the Internet, have made it possible to transform the supply
management function in many companies. This transformation has been referred to as e-procurement. E-procurement is defined as the use of Internet technologies for supply management and includes many activities, such as enterprise resource planning applications, online sourcing, and e-auctions (Hartley et al. 2004, Mithas and Jones 2007). This chapter investigates the e-procurement area of online auctionsmore specifically, double auctions and their potential benefit to supply managers.
