Do electronic marketplaces lower the price of goods?
Communications of the ACM
Reducing buyer search costs: implications for electronic marketplaces
Management Science - Special issue: Frontier research on information systems and economics
Endogeneity in Brand Choice Models
Management Science
When and How is the Internet Likely to Decrease Price Competition?
Marketing Science
Intermediation and electronic markets: aggregation and pricing in internet commerce
Intermediation and electronic markets: aggregation and pricing in internet commerce
Frictionless Commerce? A Comparison of Internet and Conventional Retailers
Management Science
On the Depth and Dynamics of Online Search Behavior
Management Science
Risk profile and consumer shopping behavior in electronic and traditional channels
Decision Support Systems
Reintermediation strategies in business-to-business electronic commerce
International Journal of Electronic Commerce - Special issue: Electronic intermediaries and networks in business-to-business electronic commerce
Information Systems Research
Journal of Management Information Systems
International Journal of Electronic Commerce
International Journal of Electronic Commerce
Designing online selling mechanisms: Transparency levels and prices
Decision Support Systems
Game theory and the practice of revenue management
Proceedings of the Behavioral and Quantitative Game Theory: Conference on Future Directions
Using Transaction Prices to Re-Examine Price Dispersion in Electronic Markets
Information Systems Research
À la carte pricing and price elasticity of demand in air travel
Decision Support Systems
Event history, spatial analysis and count data methods for empirical research in information systems
Information Technology and Management
Co-opetition Between Differentiated Platforms in Two-Sided Markets
Journal of Management Information Systems
Advice sharing between paired users in online travel planning
Journal of Theoretical and Applied Electronic Commerce Research
Hi-index | 0.00 |
The Internet has brought consumers increased access to information to make purchase decisions. One of the expected consequences is an increase in the price elasticity of demand, or the percent change in demand caused by a percent change in price, because consumers are better able to compare offerings from multiple suppliers. In this paper, we analyze the impact of the Internet on demand, by comparing the demand functions in the Internet and traditional air travel channels. We use a data set that contains information for millions of records of airline ticket sales in both online and offline channels. The results suggest that consumer demand in the Internet channel is more price elastic for both transparent and opaque online travel agencies (OTAs), in part, because of more leisure travelers self-selecting the online channel, relative to business travelers. Yet, after controlling for this channel self-selection effect, we still find differences in price elasticity across channels. We find that the opaque OTAs are more price elastic than the transparent OTAs, which suggests that product information can mitigate the price pressures that arise from Internet-enabled price comparisons. We discuss the broader implications for multichannel pricing strategy and for the transparency-based design of online selling mechanisms.