Understanding Digital Markets: Review and Assesment

Smith, Michael D.; Bailey, Joseph P.; Brynjolfsson, Erik

doi:10.2139/ssrn.290326

Cited by 242 publications

(212 citation statements)

References 35 publications

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“…Betancourt and Gautschi (1993) find that service quality significantly affects price dispersion in traditional markets, such that firms with higher service quality charge higher prices. Smith et al (2000) discuss that shopping convenience and reliability in fulfillment, which are two examples of service quality, contribute to price variation in electronic markets. Pan et al (2002), who investigate the role of vendor service quality as an antecedent to price dispersion, find partial support for the effects of e-tailer service quality's effects on price.…”

Section: Hypothesis 1 (H1) Products With Higher Cost Are Associated mentioning

confidence: 99%

Using Transaction Prices to Re-Examine Price Dispersion in Electronic Markets

Ghose

Yao

2011

Information Systems Research

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P rice dispersion is an important indicator of market efficiency. Internet-based electronic markets have the potential to reduce transaction and search costs, thereby creating more efficient, "frictionless" markets, as predicted by theories in information economics. However, earlier work has reported significant levels of price dispersion on the Internet, which is in contrast to theoretical predictions. A key feature of the existing stream of work has been its use of posted prices to estimate price dispersion. In theory, this can lead to an overestimation of price dispersion because a sale may not have occurred at the posted price. In this research, we use a unique data set of actual transaction prices collected from both the electronic and offline markets of buyers in a businessto-business market to evaluate the extent of price dispersion. We find that price dispersion in the electronic market is as low as 0.22%, which is substantially less than that reported in the existing literature. This near-zero price dispersion suggests that in some electronic markets the "law of one price" can prevail when we consider transaction prices, instead of posted prices. We further develop a theoretical framework that identifies several new drivers of price dispersion using transaction data. In particular, we focus on four product-level and market-level attributes-product cost, order cycle time, own price elasticity, and transaction quantity, and we estimate their impact on price dispersion. We also examine the electronic market's moderating role in the relationship between these drivers and price dispersion. Finally, we estimate the efficiency gains that accrue from transactions in the relatively friction-free market and find that the electronic market can enhance consumer surplus by as much as $97.92 million per year.

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Section: Hypothesis 1 (H1) Products With Higher Cost Are Associated mentioning

confidence: 99%

Using Transaction Prices to Re-Examine Price Dispersion in Electronic Markets

Ghose

Yao

2011

Information Systems Research

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“…Dayal et al (1999) propose a trust pyramid in which state-of-art security, merchant legitimacy, and fulfillment are the core drivers of online trust while customer control, tone and ambience and consumer collaboration are the differentiating drivers. Other potential drivers of online trust include site longevity, selection of items, online community, links to and from other sites, search engine on the site, and privacy (Smith et al, 2000). Hoffman et al (1999) focus on security and privacy as the key drivers of online trust.…”

Section: Information Systems and E-business Literaturementioning

confidence: 99%

“…Yoon (2002) studied trust in the context of online purchase decision-making through simulation and surveys. He concluded that Web-site trust is determined by company Hoffman et al (1999) Customer; how to improve online trust Environmental control or consumer's ability to control the actions of a Web vendor directly affects perception of security and privacy, key drivers of online trust Smith et al (2000) Customer; indicators of online trust…”

Section: Information Systems and E-business Literaturementioning

confidence: 99%

Online trust: a stakeholder perspective, concepts, implications, and future directions

Shankar

Urban²,

Sultan

2002

The Journal of Strategic Information Systems

506

245

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Online trust is important in both business-to-business and business-to-consumer e-business. Consumers and businesses, feeling the pressure of economic downturn and terrorism, increasingly look to buy from and do business with organizations with the most trusted Web sites and electronic networks. Companies' perception of online trust has steadily evolved from being a construct involving security and privacy issues on the Internet to a multidimensional, complex construct that includes reliability/credibility, emotional comfort and quality for multiple stakeholders such as employees, suppliers, distributors and regulators, in addition to customers. Further, trust online spans the end-to-end aspects of e-business rather than being just based on the electronic storefront. Based on a review of selected studies, we propose a stakeholder theory of trust, articulate a broad conceptual framework of online trust including its underlying elements, antecedents, and consequences, and propose some promising future research avenues in online trust. This paper will help information systems professionals better understand the online trust perspectives of multiple stakeholders, the antecedents and consequences, thereby enabling them to build more trustworthy Web sites. q

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“…Die Strategie von Unternehmen zur Bindung ihrer Kunden im E-Commerce sollte daher beinhalten, Kunden durch einen solchen Filter einen Mehrwert anzubieten. Zeitersparnis oder erhöhte Bequemlichkeit für Kunden können beispielsweise gewinnbringend eingesetzt werden [SmBa99]. Als Maßnahme zur Kundenbindung im E-Commerce wird u.a.…”

Section: One-to-one Marketing Im E-commerceunclassified

Erfolgswirkungen von One-to-One Marketing — Eine empirische Analyse

Eifert

Pippow

2001

Information Age Economy

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Understanding Digital Markets: Review and Assesment

Cited by 242 publications

References 35 publications

Using Transaction Prices to Re-Examine Price Dispersion in Electronic Markets

Using Transaction Prices to Re-Examine Price Dispersion in Electronic Markets

Online trust: a stakeholder perspective, concepts, implications, and future directions

Erfolgswirkungen von One-to-One Marketing — Eine empirische Analyse

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