Buyers’ Strategic Behavior in B2B Multichannel Auction Markets: When an Online Posted Price Channel Is Incorporated into a Dutch Auction System

Firms are increasingly adopting different sales channels to reach new potential buyers. Yet, extant research has mainly focused on B2C online and offline posted price channels. B2B multichannel and, especially, systems with multiple pricing mechanisms are largely underexplored. This paper investigates the strategic behaviors of B2B buyers in a unique system where an online posted price channel is incorporated into a Dutch auction market. We follow buyers’ purchasing paths and examine conditions under which B2B buyers will use one or both channels. We incorporate learning and experience and demonstrate how buyers’ behaviors evolve. Our results, using an extensive data set from the world’s largest flower market, reveal that different from B2C buyers who purchase in small quantities with fewer strategic decisions involved, B2B buyers strategically choose and combine different price mechanisms based on not only their demand but also product portfolio diversity and experiences. Moreover, different from preoccupied concerns, the integration of an online posted price channel into a Dutch auction system can bring benefits to sellers without market disruptions.