Information Transparency in B2B Auction Markets : The Role of Winner Indentity Disclosure
Information Systems and Operations Management
Speaker : Eric van HECK
Professor of Information Management and Markets
Rotterdam School of Management
HEC Campus - Jouy-En-Josas - Buil. V - Room Bernard Ramanantsoa
One of the central issues in auction design is how much information should be disclosed to bidders. In this paper, we examine bidder’s identity disclosure in sequential business-to-business (B2B) auctions. Specifically, we compare two information disclosure policies, one that publicly discloses winners’ identities (the status quo) and an alternative policy that conceals winners’ identities. Using a large-scale field experiment in the Dutch flower auction market, we find that concealing winners’ identities can significantly increase the average winning price and thereby raise the seller’s revenue. We further explore the underlying mechanism that drives the observed effect. The empirical analysis of bidding behavior in these auctions suggests that bidders tend to imitate some of their competitors who have won in previous rounds of auctions and shade their bids accordingly. Concealing winners’ identities can disrupt such imitation heuristic, which in turn mitigates the price declining trend in sequential rounds. Our findings have important implications for the design of information disclosure policies in B2B auction markets.
Eric van Heck is Professor of Information Management and Markets, Rotterdam School of Management, Erasmus University (RSM). His research concentrates on the role and impact of business architectures and digital platforms to deal with complex societal and business challenges. At the moment he works on Auction Markets, Big Data & Analytics, Digital Business & Architecture, and Digital Work. He is an active member of the Erasmus Center for Data Analytics and the Erasmus Center for Future Energy Business. Research is carried out in collaboration with innovative companies and universities in Brazil, China, Europe, Indonesia, and USA.