Abstract:

In this paper, the authors report on a computer-based laboratory experiment investigating whether disclosing the buyer’s preferences in a multi-attribute reverse English auctions affects buyer’s utility, suppliers’ profits and efficiency. The results show that full revelation of the buyer’s preferences significantly increases allocational efficiency. Suppliers use the additional information in their bidding decisions and make weakly significantly more profits. However, the experimental evidence does not support the hypothesis that the buyer is better off when revealing her preferences. At least, the results indicate that the buyer is not exploited by suppliers.