A Temporary Monopolist: Taking Advantage of Information Transparency on the Web.

Author List: Dewan, Rajiv M.; Freimer, Marshall L.; Jiang, Yabing;
Journal of Management Information Systems, 2007, Volume 24, Issue 2, Page 167-194.
Information displayed on an e-commerce site can be used not just by the intended customers but also by competitors. While retailers enhance service quality by linking inventory systems to Web servers and making stockout information available in real time, that stockout information could also be used by competitors in determining their prices on current stocks. In this paper, we examine the effect of such proactive use of information in the setting of e-commerce retailing where duopoly retailers set their prices of a commodity that is in short supply. We show that when customer reservation value is relatively high and retailers are differentiated in fill rate, both retailers choose the dynamic pricing strategy in equilibrium. By investing in Web scraping technology, retailers automatically monitor each other's stock status and dynamically adjust prices contingent on rival's stock availability.
Keywords: contingentpricing;e-commerce;information transparency;verticaldifferentiation
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#41 0.247 price prices dispersion spot buying good transaction forward retailers commodity pricing collected premium customers using posted relatively obtain listing uncertainty
#288 0.154 customer customers crm relationship study loyalty marketing management profitability service offer retention it-enabled web-based interactions operations sales strategy channels set
#5 0.098 consumer consumers model optimal welfare price market pricing equilibrium surplus different higher results strategy quality cost lower competition firm paper
#33 0.092 web site sites content usability page status pages metrics browsing design use web-based guidelines results implications portal loyalty navigability addition
#176 0.065 e-commerce value returns initiatives market study announcements stock event abnormal companies significant growth positive using methodology investments period time initiative
#147 0.059 process problem method technique experts using formation identification implicit analysis common proactive input improvements identify traditional stages identifying explicit setting