Production and Operations Management

Multiple‐Winner Award Rules in Online Procurement Auctions

Journal Article

This study investigates a novel mechanism—multiple‐winner award rules—that are widely used in e‐procurement auctions and crowdsourcing sites. In many e‐procurement auctions, the auctioneer (i.e., the buyer) specifies three rules before the auction starts: (i) the size of the finalist set (from which the winner[s] will be chosen); (ii) the number of winners; and (iii) the allocation of the contract among the winners. We examine how these three rules affect auction performance using a dataset of online procurement auctions across a variety of product categories. We find that the multiple‐winner award rules significantly impact the suppliers’ participation decisions, which is an important factor in determining the economic performance of the auction (i.e., buyer's savings). Most interestingly, these three rules systematically induce opposite effects on auction participation for two types of suppliers: experienced and inexperienced bidders. For example, increasing the number of winners encourages experienced suppliers, but discourages inexperienced suppliers from participating in the auction. On the other hand, raising the disparity in the contract allocation among winning bidders (e.g., from 50/50 to 90/10 split) deters experienced suppliers, but motivates inexperienced suppliers to participate. These findings provide guidelines for industrial buyers and crowdsourcing hosts on how to effectively make use of multiple‐winner design levers to promote suppliers’ participation when designing procurement auctions and crowdsourcing contests.

Related Topics

Related Publications

Related Content

Site Footer


This website is provided by John Wiley & Sons Limited, The Atrium, Southern Gate, Chichester, West Sussex PO19 8SQ (Company No: 00641132, VAT No: 376766987)

Published features on are checked for statistical accuracy by a panel from the European Network for Business and Industrial Statistics (ENBIS)   to whom Wiley and express their gratitude. This panel are: Ron Kenett, David Steinberg, Shirley Coleman, Irena Ograjenšek, Fabrizio Ruggeri, Rainer Göb, Philippe Castagliola, Xavier Tort-Martorell, Bart De Ketelaere, Antonio Pievatolo, Martina Vandebroek, Lance Mitchell, Gilbert Saporta, Helmut Waldl and Stelios Psarakis.