Multi-bilateral negotiations and multi-attribute reverse auctions: An experimental study of concession-making

Reverse auctions and multi-bilateral negotiations are two common procurement mechanisms in which concession-making plays a key role. A two-dimensional typology of concessions is proposed and empirically verified in two experiments. The results show that: (1) bidders and negotiators use all types of permissible concessions; (2) concessions are greater in auctions than in negotiations; and (3) extrinsic motivation affects concession-making.