Abstract
In this paper, we modify standard multidimensional procurement auction models by the assumption of reference‐based utility. We analyze how the reference‐based utility of a buyer affects the outcomes of multidimensional procurement auctions. Furthermore, we also investigate the optimal reference‐based utility of a buyer and demonstrate that the multidimensional procurement auctions with reference‐based utility dominate several other commonly used procedures for buying differentiated products. Our results extend the standard analysis of multidimensional procurement auctions (e.g., Che, 1993; Asker & Cantillon, 2008) to more economically reasonable cases.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
