Electronic Markets, Special Issue on B2B E-Commerce, 2002, Vol. 12, No. 2, pp. 92-99.

Information Transparency in Electronic Marketplaces:

Why Data Transparency May Hinder the Adoption of B2B Exchanges

Abstract

The online B2B environment makes a vast amount of data about prices and costs available on the Internet, which tends to make information more transparent in electronic marketplaces. In this study, we focus on the informational effects of Internet-based B2B exchanges, and explore the incentives for buyers and suppliers to join a B2B exchange. We found that information disclosure rules crucially affect the firms’ incentives. Data transparency benefits some firms but hurts others. We also found that low-cost suppliers and high-value buyers would be early adopters of the B2B exchange. In addition, B2B exchange owners should keep an appropriate balance between information transparency and data confidentiality so as to minimize the competitive risks while safeguarding the collaborative benefits of information transparency.

Key words

Information economics, information transparency, microstructure, business to business, online exchange, data disclosure