Abstract: Motivated by the rapid growth of the online outsourcing market, a multi-attribute auction model for online service outsourcing is studied, in which multiple potential suppliers bid service quality and service price, and renegotiation may take place after the determination of auction winner. To investigate the effects of service content renegotiation on the players' decisions and expected profits, both a scenario without renegotiation and one with renegotiation are examined and compared. Results show that, without renegotiation, the suppliers' service quality and information rent are increasing inthe initial service contentannounced by the buyer. However, in the scenario withrenegotiation, although the buyer's weighting of service quality increases inthe initial service content, the suppliers' service quality, information rent and buyer's expected profits are not affected by the initial service content. In other words, the regulation function of the initial service content is completely substituted by renegotiation. Furthermore, comparisons show that the renegotiation option leads to higher service quality and higher ex post service content, and it makes the buyer, the winning supplier and the platform better off. The study contributes to the literature by providing a buyer-determined auction model for online service outsourcing considering renegotiations, and it provides insights on the value of renegotiation for online service providers, buyers and transaction platforms.

Key words: multi-attribute procurement auctions, service outsourcing, renegotiation, online outsourcing platform, bidding equilibrium