Multi‐Criteria Markets: An Exploratory Study of Market Process Design

Abstract

This paper explores market process design for multi‐criteria markets using the electronic market process design work of Ribbers et al. (2002) and Kambil and van Heck (1998). The study utilizes a case study of a market intermediary in the utilities sector to examine how multi‐criteria markets differ from price‐only alternatives. The study reveals significant differences in the role of the intermediary in the operation of multi‐criteria markets, as well as marked differences in market process design in the areas of authentication, product representation and communications/computing. We conclude that these differences represent a fundamental shift in B2B procurement relationships from those described by Kaplan and Sawhney (2000) towards strategic sourcing.

Keywords:

• multi‐variable auctions
• strategic sourcing
• procurement
• case research

Notes

1. Eutila shareholders decided on the 23 November 2006 to liquidate the company, citing that ‘despite five years of successful operations, most customers preferred a private marketplace solution’ (www.eutila.com). An overview of Eutila operations from 2001 to 2006 is provided in Appendix I.