Supplier Responses to Platform Recommendations in Business-to-Business Electronic Commerce

Business-to-business electronic commerce (B2B e-commerce) platforms increasingly use recommendations to connect suppliers with potential business opportunities in the form of buyers' requests for quotation (RFQs). Yet little is known about whether and how these platform recommendations affect supplier bidding behavior and bidding success. Using data from a constructionsector B2B e-commerce platform, we find that receiving a recommendation increases not only the probability of bidding on the recommended RFQs by 1.4 percentage points (direct effect) but also the probability of bidding on non-recommended RFQs by 0.7 percentage points (spillover effect). The positive spillover effect emerges because platform recommendations prompt suppliers to broaden their search and pursue additional opportunities beyond focal RFQs. However, the positive spillover effect does not translate into a higher probability of winning because spillover bids tend to target popular yet less relevant RFQs. Further, losing bids is positively associated with the likelihood of supplier churn over the subsequent six months. Collectively, we show that engagement-centric recommender systems in B2B markets may broaden supplier bidding participation without improving bidding success, highlighting the importance of accounting for trade-offs among multiple platform objectives.