Reducing buyer search costs: implications for electronic marketplaces
Management Science - Special issue: Frontier research on information systems and economics
Frictionless Commerce? A Comparison of Internet and Conventional Retailers
Management Science
Price-Endings When Prices Signal Quality
Management Science
Third-Party Product Review and Firm Marketing Strategy
Marketing Science
Reputation Mechanism Design in Online Trading Environments with Pure Moral Hazard
Information Systems Research
Beyond the Hype of Frictionless Markets: Evidence of Heterogeneity in Price Rigidity on the Internet
Journal of Management Information Systems
International Journal of Electronic Commerce
Consumer E-Tailer Choice Strategies at On-Line Shopping Comparison Sites
International Journal of Electronic Commerce
Price Comparison and Price Dispersion: Products and Retailers at Different Internet Maturity Stages
International Journal of Electronic Commerce
Information Technology and Management
The Brand Effect of Key Phrases and Advertisements in Sponsored Search
International Journal of Electronic Commerce
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The frequency of occurrence of certain price points in Internet-based selling is investigated in order to determine what drives the observed regularities and variations. Theories based on consumer perceptions of price and quality images, and on rational inattention to price-endings are explored by specifying and testing empirical models for price-endings using more than 1.5 million daily observations on multiple product categories sold by 90 Internet-based retailers collected over a two-year period. The results show that a firm's on-line reputation and relative price levels affect the price-endings chosen in different product categories, and that 9-ending prices increase consumer purchases. These findings support an image theory of store quality and price. The use of 9-ending prices varies across Internet selling formats in a way consistent with differences in the rational attentiveness these channels engender in consumers. This research on the role of information technology in price-setting provides insights for marketers who wish to optimize price-setting decisions in the competitive environment of Internet retailing.