The paper presents insights regarding the key learning‐related factors a buyer should consider when deciding the extent to which information about bids is revealed in a procurement auction context. It offers the insights by analyzing the following two first‐price sealed‐bid policies in a private‐value sequential auction with no winner dropouts: (i) iis, where only the winner's bid is revealed, and (ii) cis, where all bids are revealed. Our analysis identifies two important learning effects–the extraction and the deception effects–as having significant welfare implications. Both these effects arise because of a bidder's desire to gain an informational advantage relative to his competitors, but their manifestations are different. The extraction effect occurs because of a bidder's incentive to learn about his competitors, and the deception effect is a consequence of the incentive to prevent an opponent from gaining the information. Both effects lead to higher bid prices, and either may be dominant from a procurer surplus standpoint. With the deception effect, social welfare can decrease even when the number of suppliers increases, a result that is counterintuitive. The paper also discusses how insights regarding the learning effects might apply to other policies.
