‘The eAuction Game’
Essentially, the game consists of a reverse ranked auction (suppliers competing to sell goods or services by offering increasingly declining values in an auction style that gives a rank to suppliers based on their position on the lot) being created by the host and the audience being divided into teams. We (Market Dojo) act as the buyer, whilst the audience acts as suppliers. Each team are given an identical budget and are instructed to place multiple bids on a reverse auction across a number of different lots. The objective of the game is to be Ranked 1st (offering the lowest value) on as many lots as possible whilst maintaining a total bid value that is above that of the overall minimum bid.
When conducting the game we encourage the teams to use different tactics and strategies as a supplier to win the lots. Typically teams unwittingly use eAuction tactics such as ‘Shadow Bidding’ (bidding slightly less than the lead bidder), ‘Sniping’ (waiting to bid until the last moment to win the lot) or ‘Squatting’ (continually bidding to continue as lead bidder).
One area that we draw attention to after the event is the starting tactics of each team. The initial bids are very important as they can determine the outcome of the auction. One strategy is to quickly drop a small amount at the start of the auction and then waiting to see how many teams bid for that lot by seeing the change in their position from 1st.
The purpose of ‘The eAuction Game’ for buyers is to illustrate that when using an eSourcing software, the host will receive a value that is closer to the ‘true market value’ than they would have otherwise and demonstrate the different tactics or strategies involved with real world implications. The game signifies that the success of an eAuction for a buyer, typically derives from two factors: the competitiveness of the suppliers involved and the numbers of suppliers that are involved.
In the event that more than one suppliers has won an equal number of lots. The supplier which has offered the lowest overall value wins. Tied equal lots can also be decided by who has won their lot for the greatest margin.