Reputation and Certification in Online Shops

We investigate the impact of self-organized reputation versus certification by an independent institution on demand for online shops. Using data from a large Austrian price comparison site, we show that quality seals issued by a credible and independent institution increase demand more than feedback-based reputation. This result is important for markets where the market-maker must deal with issues of asymmetric information concerning the quality of goods and services in the market.Online markets, search engines, signaling, certification, reputation

Prices and Price Dispersion on the Web: Evidence from the Online Book Industry

Using data collected between August 1999 and January 2000 covering 399 books, including New York Times bestsellers, computer bestsellers, and random books, we examine pricing by thirty-two online bookstores. One common prediction is that the reduction in search costs on the Internet relative to the physical channel would cause both price and price dispersion to fall. Over the sample period, we find no change in either price or price dispersion. Another prediction of the search literature is that the prices and price dispersion of advertised items or items that are purchased repeatedly will be lower than for unadvertised or infrequently purchased items. Prices across categories of books appear to conform to this prediction, with New York Times bestsellers having the lowest prices as a fraction of the publisher's suggested price and random books having the highest prices. Interestingly, price dispersion does not conform with this prediction, apparently for reasons related to stores' decisions to carry particular books. One reason why we may not observe convergence in prices is because stores have succeeded in differentiating themselves even though they are selling a commodity product. We observe differentiation (or attempted differentiation) by a significant number of firms.

Shopbots, Powershopping, Powersales: New Forms of Intermediation in E-Commerce - An Overview -

With the advent and proliferation of the Internet many aspects of business and market activities are changing. New forms of intermediation also called cybermediaries are becoming increasingly important as a coordinator of interaction between buyers and sellers in the electronic market environment. Especially the overwhelming abundance of information offered by the Internet promotes the development of new intermediarie like malls, shopbots, virtual resellers etc. This paper provides a detailed overview of different new forms of cybermediation and illustrates their influence on consumer choice, firm pricing and product differentiation strategies.comparison shopping, cybermediaries, e-commerce, shopbots

The Impacts of Shopbots on Online Consumer Search

Online price comparison agents (shopbots) allow consumers to instantaneously receive price and other information from many online retailers. Online consumer clickstream data from ComScore Inc. demonstrate that consumers are increasingly using shopbots to conduct search. This phenomenon raises such questions as "how do shopbots change consumers' search behavior?" and "do they reduce consumers' online search?" Conventional wisdom suggests that consumers are expected to search less because shopbots have displayed prices and other relative information from retailers on the search result page(s). Surprisingly, this study demonstrates the opposite result. That is, consumers are actually visiting more online retailer web sites after using shopbots. This finding suggests that after searching for an item through a shopbot and receiving the price information, consumers will continue to look for detailed information about the online retailers by visiting their web sites. The empirical finding is explained by an analytical model, which shows that on the one hand shopbots reduce the marginal benefit of searching additional online stores; on the other hand they reduce the cost of search. Therefore whether shopbots reduce consumer search depends on the cost of reducing per unit of risk, which is decided by a number of factors, such as marginal search costs, price dispersion and quality differentiation among stores, price and quality correlation, and consumers' relative preference for service quality. The model also gives sufficient and necessary conditions under which shopbots increase consumer surplus

Moving from Data-Constrained to Data-Enabled Research: Experiences and Challenges in Collecting, Validating and Analyzing Large-Scale e-Commerce Data

Widespread e-commerce activity on the Internet has led to new opportunities to collect vast amounts of micro-level market and nonmarket data. In this paper we share our experiences in collecting, validating, storing and analyzing large Internet-based data sets in the area of online auctions, music file sharing and online retailer pricing. We demonstrate how such data can advance knowledge by facilitating sharper and more extensive tests of existing theories and by offering observational underpinnings for the development of new theories. Just as experimental economics pushed the frontiers of economic thought by enabling the testing of numerous theories of economic behavior in the environment of a controlled laboratory, we believe that observing, often over extended periods of time, real-world agents participating in market and nonmarket activity on the Internet can lead us to develop and test a variety of new theories. Internet data gathering is not controlled experimentation. We cannot randomly assign participants to treatments or determine event orderings. Internet data gathering does offer potentially large data sets with repeated observation of individual choices and action. In addition, the automated data collection holds promise for greatly reduced cost per observation. Our methods rely on technological advances in automated data collection agents. Significant challenges remain in developing appropriate sampling techniques integrating data from heterogeneous sources in a variety of formats, constructing generalizable processes and understanding legal constraints. Despite these challenges, the early evidence from those who have harvested and analyzed large amounts of e-commerce data points toward a significant leap in our ability to understand the functioning of electronic commerce.Comment: Published at http://dx.doi.org/10.1214/088342306000000231 in the Statistical Science (http://www.imstat.org/sts/) by the Institute of Mathematical Statistics (http://www.imstat.org

E-Commerce and its effect upon the Retail Industry and Government Revenue

This paper was written by William Steel, Toby Daglish, Lisa Marriott, Norman Gemmell, Howell, Bronwyn and presented at a seminar on 20 March 2013, info her

Buying Online: Sequential Decision Making by Shopbot Visitors

In this article we propose a two stage procedure to model demand decisions by customers who are balancing several dimensions of a product. We then test our procedure by analyzing the behavior of buyers from an Austrian price comparison site. Although in such a market a consumer will typically search for the cheapest price for a given product, reliability and service of the supplier are other important characteristics of a retailer. In our data, consumers follow such a two stage procedure: they select a shortlist of suppliers by using the price variable only; finally, they trade off reliability and price among these shortlisted suppliers.E-commerce, price comparison, decision theory, heuristics, seller reputation