Information Disclosure in Open Non-Binding Procurement Auctions: an Empirical Study

The outcome of non-binding reverse auctions critically depends on
how information is distributed during the bidding process. We use
data from a large European procurement platform to study the impact
of different information structures, specifically the availability
of quality information to the bidders, on buyers' welfare and
turnover of the platform. First we show that on the procurement
platform considered bidders indeed are aware of their rivals'
characteristics and the buyers preferences over those non-price
characteristics. In a counterfactual analysis we then analyze the
reduction of non-price information available to the bidders. As we
find, platform turnovers in the period considered would decrease by
around 30%, and the buyers' welfare would increase by the monetary
equivalent of around 45% of turnover of the platform.