Impressionable or Immune? Examining the Influence of Marquee Sellers in B2B Secondary Market Platforms for IT Products

2023 | Information Systems Research | Citations: 0

Authors: Alhauli, Abdullah; Elmaghraby, Wedad J.; Gopal, Anandasivam

Abstract: Although digital platforms have become mainstream, there still remain some unans ... Expand

Abstract: Although digital platforms have become mainstream, there still remain some unanswered questions pertaining to managing platform ecosystems. One such unexplored question pertains to the effect of marquee sellers on the platform—marquee sellers arguably attract other sellers and buyers to the platform, thereby enhancing the platform’s value. In this paper, we study how adding a marquee seller to a business-to-business (B2B) secondary-market platform for IT products affects other sellers, in terms of the prices they obtain for comparable products. Using proprietary data on B2B secondary-market auctions obtained from a platform provider, we show that the entry of a marquee seller has a positive effect on the prices obtained by other sellers on the platform, reflecting a reference-price effect. We further show that this positive effect on final prices is moderated by the extent to which bidders are active on multiple seller sites on the same platform and the extent to which bidders participate in the marquee seller site. We explain these effects using theory in multihoming and involvement, in terms of how reference prices are set. Our work extends the platforms literature by considering the specific influence of a marquee seller on other sellers, thereby informing platform owners on the implications of the advice to add more marquee sellers to platforms. We also contribute to the literature on secondary markets for durable, used IT products, which are instrumental in reducing electronic waste and mitigating the environmental damage done by electronic products in landfills.History: Raghu Santanam, Senior Editor; Pallab Sanyal, Associate Editor.Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2022.1137. Collapse

Topics: Apple iPhone business-to-business willingness to pay network effect mobile system

Methods: robustness check descriptive statistic statistical hypothesis test post-hoc analysis ordinary least square

Theories: involvement theory

The Effect of Posted Prices on Auction Prices: An Empirical Investigation of a Multichannel B2B Market

2023 | Management Information Systems Quarterly | Citations: 0

Authors: Truong, May; Gupta, Alok; Ketter, Wolfgang; Heck, Eric van

Abstract: Although multichannel sales strategies have become common due to the use of adv ... Expand

Abstract: Although multichannel sales strategies have become common due to the use of advanced information technologies, how one trading mechanism can influence the outcome of another, especially in the B2B market, remains largely underexplored. This paper investigates the effect of price and quantity information from an online posted-price presales channel on the performance of the century-old sequential Dutch auction system. Sellers can control the price paid and make a proportion of their stock available in auction presales. Anything left after presales is sold via auctions. Our analysis of nearly 1.5 million flower lots reveals a positive effect with higher auction prices and total revenue for lots listed in presales than for lots that are not. The result holds even for lots with no actual sales in the presales, indicating that buyers pay close attention to the additional information from the posted-price presales channel. By teasing out the information effect of presales prices and presales quantity on auction prices, we evaluate a number of pricing strategies. The results suggest that selling at a high price in presales is still more beneficial than selling more by discounting prices. Collapse

Topics: business-to-business data breach price management Twitter business-to-consumer

Methods: robustness check cluster analysis qualitative interview mediation analysis descriptive statistic

Theories: signaling theory

Adverse Selection in B2B Secondary Market Online Auctions for IT Equipment: An Empirical Analysis

2022 | Management Information Systems Quarterly | Citations: 0

Authors: Alhauli, Abdullah; Elmaghraby, Wedad; Gopal, Anandasivam

Abstract: Online business-to-business auctions for used IT products have emerged as a viab ... Expand

Abstract: Online business-to-business auctions for used IT products have emerged as a viable market for finding a second life for these products, rather than having them end up in landfills as e-waste. As part of the growing “secondary market” landscape, these online B2B auctions are significantly affected by adverse selection since uncertainty about product quality from their first life remains in place. We study how these adverse selection costs may be identified and reduced in online B2B auctions for mobile phones using a proprietary data set for pallets of iPhone devices. We focus on the differences between carrier-locked and unlocked iPhones, and the degree to which the jailbreaking of devices may lead to adverse selection costs. We first show that uncertainty with respect to the possibility of jailbreaking-to-unlock induces significant adverse selection costs in this market. We identify a clear method that these adverse selection costs may be reduced through policies implemented in the primary market. We find that adverse selection costs exist with respect to jailbreaking-to-unlock, by comparing prices obtained for locked and unlocked devices, as well as pallets where this information is not disclosed. However, when some of the uncertainty surrounding jailbreaking-to-unlock is removed by virtue of an exogenous policy change implemented by Verizon in the primary market, i.e., to sell all iPhones as factory unlocked, adverse selection costs are significantly reduced. Our work has significant implications for enhancing the efficiency of secondary markets for IT products, by virtue of highlighting the connections between primary and secondary markets. Managerial and theoretical implications that emerge from this work are discussed in the paper. Collapse

Topics: Apple iPhone business-to-business logistics management willingness to pay mobile phone

Methods: regression analysis method experiment descriptive statistic mixed method theory development

Theories: lemon market theory

Evaluating the emotional bidding framework: new evidence from a decade of neurophysiology

2022 | Electronic Markets | Citations: 1

Authors: Adam, Marc T. P.; Krämer, Jan

Abstract: Ten years ago the “emotional bidding framework” (Adam et al., Electronic Markets ... Expand

Abstract: Ten years ago the “emotional bidding framework” (Adam et al., Electronic Markets, 21(3), 197–207, 2011b) was published in this journal. It provided a conceptualization for the role of human emotion in electronic auctions along six propositions on how emotions emerge during the auction process and affect auction outcomes. While the framework emphasized the importance of immediate emotional responses and momentary changes in the bidders’ emotional state, the original article did not include an evaluation of its propositions given the limited data on how bidders experience emotions in the moment that they occur. Ten years on, advances in the growing research field of NeuroIS allow to evaluate the propositions based on neurophysiological evidence. As a rejoinder of the original article, the present paper synthesizes these insights, refines the framework further, and identifies fruitful areas for future research based on remaining gaps in the body of knowledge. Collapse

Topics: online auction

Methods: neurophysiology NeuroIS mixed method synthesis

Introduction to the Information Systems Research Special Section on Market Design and Analytics

2022 | Information Systems Research | Citations: 0

Authors: Bapna, Ravi; Day, Bob; Ketter, Wolf; Bichler, Martin

Abstract: Please scroll down for article-it is on subsequent pagesWith 12,500 members fro ... Expand

Abstract: Please scroll down for article-it is on subsequent pagesWith 12,500 members from nearly 90 countries, INFORMS is the largest international association of operations research (O.R.) and analytics professionals and students. INFORMS provides unique networking and learning opportunities for individual professionals, and organizations of all types and sizes, to better understand and use O.R. and analytics tools and methods to transform strategic visions and achieve better outcomes. For more information on INFORMS, its publications, membership, or meetings visit Collapse

Topics: online dating outsourcing online auction

Methods: difference in differences theory development econometric modeling field experiment

Effect of Market Information on Bidder Attrition in Online Auction Markets

2022 | Management Information Systems Quarterly | Citations: 0

Authors: Ghasemkhani, Hossein; Goes, Paulo; Tripathi, Arvind

Abstract: Information generated in online markets can affect both buyers’ and sellers’ exp ... Expand

Abstract: Information generated in online markets can affect both buyers’ and sellers’ expectations and therefore their choices. In this research, we investigate the effect of market information, generated in online auction markets, on buyers’ expectations and choices. To clear large inventories, sellers often conduct many auctions selling identical items over time, which creates an online auction market where competition dynamics spill over from one to auction to another. In these markets, bidders can participate in many auctions over a period of time, observe market information (supply, demand, and competition), and gain experience to increase their payoffs. We observe that despite having an opportunity to compete and win in future auctions, many bidders stop participating in these auction markets. We argue that observed market information affects their choices. We explore how bidders form expectations about market supply, demand, and competition based on information from two sources—market design parameters and behavior of market participants. By employing a hierarchical Bayesian latent attrition model, we empirically detect and investigate the effect of bidders’ expected market supply, demand, and competition on their attrition in these markets. Our study shows that the effect of market information on attrition is nuanced by bidders’ value heterogeneity. Through the lenses of behavioral economics theories, we show that the attrition behavior of high-value bidders is completely opposite that of low-value bidders. We discuss the practical implications of our findings. Collapse

Topics: online auction decision making electronic market willingness to pay consumer behavior

Methods: descriptive statistic hidden Markov model Markov chain Monte Carlo conceptual modelling theoretical contribution

Theories: economic theory endowment effect behavioral economics lemon market theory social learning theory

Decreasing Shopping Duration by Altering Choice Environments? An Empirical Investigation of Individual and Hybrid Nudges in the Context of e-Grocery

2022 | International Conference on Business Informatics | Citations: 0

Authors: Gottschewski, Phillip Oliver

Abstract: Boosted by the Covid-19 pandemic, the utilization of online grocery shopping has ... Expand

Abstract: Boosted by the Covid-19 pandemic, the utilization of online grocery shopping has gained an increasing relevance over recent years. Increasing customer value by reducing friction can be a key option for online grocers to maintain and increase growth, customer loyalty and satisfaction. Being easy and inexpensive to implement, digital nudges can offer distinct benefits for consumers and online grocers. In this context, we investigated the potentials of digital nudging, using anchoring, social norms and a hybrid nudging concept as rational choice triggers. Our results indicate that anchoring and hybrid nudges have a significant effect on purchase frequency, while none of the investigated concepts is capable of reducing the overall shopping duration. Interestingly, in combination with anchoring nudges, social norms do have a significantly influential effect, although individually proven to be ineffective in low involvement decision contexts such as buying groceries online. Collapse

Topics: social norm electronic commerce IT security decision making crowdsourcing

Methods: experimental group experiment descriptive statistic mediation analysis field study

Theories: loss aversion

Competing Combinatorial Auctions

2022 | Information Systems Research | Citations: 1

Authors: Kittsteiner, Thomas; Ott, Marion; Steinberg, Richard

Abstract: We investigate whether revenue-maximizing auctioneers selling heterogeneous item ... Expand

Abstract: We investigate whether revenue-maximizing auctioneers selling heterogeneous items will allow for combinatorial bidding in the presence of auctioneer competition. We compare the choice of auction format by two competing auctioneers with that of a single auctioneer. Bidders are heterogeneous in their demands, with some having synergies for items. We find that, even if a single auctioneer offers a combinatorial auction, competing auctioneers in a comparable setting will not. Instead, the competing auctioneers will segment the market by restricting allowable package bids in order to increase competition between bidders. This shows that it might not be advantageous for an online market platform to offer combinatorial auctions as a design option to competing auctioneers. History: This paper has been accepted for the Information Systems Research Special Section on Market Design and Analytics. Funding: Financial support from the Deutsche Forschungsgemeinschaft [Grants KI 1915/1-1 and OT 487/2-1] is gratefully acknowledged by T. Kittsteiner and M. Ott. Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2021.1018. Collapse

Topics: electronic market privacy product differentiation online auction strategic management

Methods: literature study

Theories: game theory

Information Asymmetry Among Investors and Strategic Bidding in Peer-to-Peer Lending

2022 | Information Systems Research | Citations: 0

Authors: Lu, Kai; Wei, Zaiyan; Chan, Tat Y.

Abstract: We study how investors in peer-to-peer (P2P) lending use their information advan ... Expand

Abstract: We study how investors in peer-to-peer (P2P) lending use their information advantages in decisions on when to place bids. Literature documents that better-informed bidders may withhold bidding until the last moment (i.e., “sniping”) to avoid competition. We argue that, because a collective effort from investors is required in P2P lending, it could be optimal for informed investors to bid early in projects with a low probability of being funded with the purpose of signaling the quality of these projects. With a unique data set from Prosper.com, we use a matching analysis to show that, for projects with low credit grades, the probability of being successfully funded is positively correlated with early bids from informed investors. For funded loans, informed investors are more likely to bid in the early stage than uninformed investors, whereas uninformed investors will follow and bid at the late stage. Finally, there are more early bids from informed investors for “good” loans than for “bad” loans, indicating that the bids are informative for the quality of those projects. Our findings have important implications for managing the information asymmetry and strategic behaviors among investors on P2P lending platforms. Collapse

Topics: crowdsourcing peer-to-peer lending Prosper privacy online auction

Methods: robustness check statistical hypothesis test multivariate statistics linear regression analysis propensity score matching

Theories: lemon market theory

Mitigating Risk Selection in Healthcare Entitlement Programs: A Beneficiary-Level Competitive Bidding Approach

2022 | Information Systems Research | Citations: 0

Authors: Montanera, Daniel; Mishra, Abhay Nath; Raghu, T. S.

Abstract: Healthcare entitlement programs in the United States represent a large and growi ... Expand

Abstract: Healthcare entitlement programs in the United States represent a large and growing financial outlay for taxpayers. In the pursuit of operational efficiencies, program administrators often contract with private managed care organizations (MCOs) to procure insurance for beneficiaries. This, however, encourages MCOs to attract the healthiest beneficiaries and avoid the sickest, a phenomenon known as risk selection. This paper investigates whether risk selection can be mitigated with a mechanism where MCOs bid to enroll each individual beneficiary. Although procurement auctions have been studied extensively in the literature, extant research has rarely discussed individual-level bidding. Digitization can contribute to the development and introduction of efficient market structures and mechanisms for matching beneficiaries with appropriate MCOs. We model demand- and supply-side aspects in a two-sided insurance marketplace to examine three mechanisms, risk adjustment, bidding, and a mix of prospective payment and bidding, with and without reserve prices. Analytical results show that traditional risk adjustment cannot optimally be used to eliminate risk selection, whereas the bidding mechanisms eliminate it entirely. Mixed bidding eliminates risk selection at a strictly lower cost than pure bidding. The proposed mixed bidding approach is a new type of mechanism with preauction offers that strictly dominates the second-price auction without requiring additional assumptions. Numerical analysis shows bidding dominates risk adjustment in 75.1% of simulated parameter sets. Compared with risk adjustment, bidding secures coordinated care for 12.1% more allocated beneficiaries while lowering program costs by 9.2% and largely preserving MCO profits. This would amount to approximately $27.2 billion in Medicaid program savings. Sensitivity analysis reveals that the proposed bidding mechanism dominates in scenarios that closely resemble real-world healthcare entitlement environments. These results show that digital markets that enable individual-level auctions are a promising approach for achieving the dual aim of financial sustainability and expanded access to care for the most vulnerable. History: This paper has been accepted by Ravi Bapna, Martin Bichler, Bob Day, and Wolfgang Ketter, Senior Editors; and Liangfei Qiu, Associate Editor, for the Information Systems Research Special Section on Market Design and Analytics. Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2021.1062. Collapse

Topics: electronic market procurement management price management health information system digital platform

Methods: simulation descriptive statistic sensitivity analysis ordinary least square synthesis

Theories: transaction cost economics