Auctions and the design of B2B markets

In our 2012 chapter titled 'Designing B2B Markets,' we put forth a primer for researchers, academics and practitioners interested in the design of auction-based mechanisms for B2B exchange. Such mechanisms provided a pathway for both formal modeling of a systematic price discovery process, as well as improved flexibility in auction design to accommodate the unique needs of B2B procurement activities. We concluded that chapter with the prediction that the next advancements in B2B reverse auction research would address how to successfully embed auction mechanisms for a broader procurement context to allow for greater flexibility in mechanism design. In this update, we describe how advancements in this vein have been made along five fronts: bidder differentiation, multidimensional considerations, negotiations, information design, and reputation concerns. Collectively, these advancements have resulted in expanding the range of price discovery mechanism options for buyers, identifying routes to improved performance, and verifying more efficient modeling techniques.