Seemingly, the translation industry does not follow the laws regulating economic activities. This is supposedly due to an information asymmetry affecting pricing mechanisms: clients and vendors lack the information necessary to evaluate transaction costs. Most often, clients are hardly able to express their service requirements, as their competences are typically inadequate for a proper evaluation of any service added value.
This leads clients to look at translation services as a cost to cut rather than as an investment whose return can bemeasured. Consequently, vendors tend tomaximize short-termprofits by cutting their production costs dramatically. Reverse auctions are the direct effect of this situation. They are the best mechanism to assign a translation job when price is the only metric. Auctions are a typical tool in a market affected by a phenomenon commonly known as commoditization. In this scenario, quality is a “unique selling proposition”, a deceptive differential. To prevent price from being the only measure, both clients and vendors should opt for service level agreements (SLAs). Clients must provide detailed requirements, while vendors must follow measurable and verifiable production processes according to commonly acknowledged standards. This demands a process-oriented approach to business, which is still rather rare.
