Improving Successful A+B Procurement Auctions with Negotiations

In A+B procurement auctions the buyer´s utility is linear and the bidders´ utility is assumed to be quasi-linear. If this assumption is met, then a successful auction may conclude with an efficient winning bid which maximizes both the buyer´s utility and social welfare. If this assumption is not met, then an auction is either efficient and maximizes social welfare or it maximizes the buyer´s utility. If the bidders are risk-averse, then a winning bid that maximizes the buyer´s utility may be further improved through negotiations. It is possible to introduce side-payments which increase utility values of both the buyer and the seller.