Reducing buyer search costs: implications for electronic marketplaces
Management Science - Special issue: Frontier research on information systems and economics
When and How is the Internet Likely to Decrease Price Competition?
Marketing Science
Consumer Addressability and Customized Pricing
Marketing Science
Marketing Science
Internet Shopping Agents: Virtual Co-Location and Competition
Marketing Science
Competition Among Sellers in Online Exchanges
Information Systems Research
The Impact of Internet Referral Services on a Supply Chain
Information Systems Research
A Model of Search Intermediaries and Paid Referrals
Information Systems Research
Oligopolistic Pricing with Online Search
Journal of Management Information Systems
| Hi-index | 0.00 |
With the explosive growth of Smartphone and telecommunication network, Location Based Service (LBS) becomes an essential application of mobile commerce. LBS application can assist consumers in getting relevant information on the spot, thus helps the consumers to make purchase decision under that particular context. Motivated by this unique feature of LBS, we study how LBS as infomediary changes the way people using information for decision making and how it differs from previous internet infomediary. We firstly classify LBS into different types and then propose a stylized model by synthesizing the price dispersion with horizontal differentiation to investigate the impact of LBS as Infomediary on retail competition and the optimal LBS adoption strategies. Previous research on prevailing Internet Infomediary has shown that the optimal LBS adoption pattern is that only one retailer adopts LBS. However, our results show that the optimal LBS strategy for LBS infomediary is that neither retailer adopts LBS. The location feature of LBS would let the retailers to price more aggressively in order to get more demand at early stage, which would limit the equilibrium profit in the subsequent pricing stages. Moreover, by comparing the results for both Internet infomediary and LBS infomediary, retailers' profit is always lower for LBS infomediary and the reduced profit depends on location parameter and consumer segmentation. We discuss the implications of our findings for retailers' marketing and technology strategies in the market with LBS.