Information revelation in multiattribute English auctions: A laboratory study

In: Decision support systems : DSS ; the international journal, Jg. 49 (2010) ; Nr. 3, S. 272-280
ISSN: 0167-9236
Zeitschriftenaufsatz / Fach: Informatik; Wirtschaftswissenschaften
Abstract:
The effects of information revelation on allocational and Pareto efficiency are studied in a multiattribute reverse English auction. The setting is a single sourcing problem in which a buyer seeks to acquire an indivisible object from exactly one of five potential suppliers. Bids are three-dimensional with two non-monetary attributes in addition to the object's price. Results from a computer-based laboratory experiment are reported, and observed differences between two information revelation policies are analyzed with respect to the buyer's utility and suppliers' profits. The results suggest that revealing the buyer's preferences increases allocational efficiency. Suppliers successfully use the additional information to make more profits, but not at the expense of the buyer whose utility increases slightly albeit not significantly.