Reducing buyer search costs: implications for electronic marketplaces
Management Science - Special issue: Frontier research on information systems and economics
E-Commerce Logistics & Fulfillment: Delivering the Goods
E-Commerce Logistics & Fulfillment: Delivering the Goods
The Value of Internet Commerce to the Customer
Management Science
Frictionless Commerce? A Comparison of Internet and Conventional Retailers
Management Science
Internet Shopping Agents: Virtual Co-Location and Competition
Marketing Science
On the Depth and Dynamics of Online Search Behavior
Management Science
Overchoice and Assortment Type: When and Why Variety Backfires
Marketing Science
Dynamic Pricing on the Internet: Importance and Implications for Consumer Behavior
International Journal of Electronic Commerce
Adoption of Internet-Based Product Customization and Pricing Strategies
Journal of Management Information Systems
A Temporary Monopolist: Taking Advantage of Information Transparency on the Web
Journal of Management Information Systems
Zero as a Special Price: The True Value of Free Products
Marketing Science
Research Note---Attention Arousal Through Price Partitioning
Marketing Science
Vickrey vs. eBay: Why Second-Price Sealed-Bid Auctions Lead to More Realistic Price-Demand Functions
International Journal of Electronic Commerce
| Hi-index | 0.00 |
The Internet has radically reduced the cost of collecting and distributing information. Consequently, researchers initially predicted that the resulting price transparency would drive prices toward a single market price. However, this has largely not happened, partly because retailers use shipping costs to make prices less comparable. Using data on 517,048 offers of 895 retailers from a leading European price comparison site, we show that retailers pursue two different shipping cost strategies. Both strategies lead to higher gross product prices, which are the sum of net product price and shipping costs and thus try to capture consumer surplus. These strategies are conflicting, however, and target different consumer segments: Some retailers charge high shipping costs and thereby try to exploit consumers' biased perceptions of partitioned prices, while other retailers offer "free shipping" to attract consumers and exploit their so-called zero-risk bias. Consumers realize the lowest gross product prices by ordering at retailers that charge moderate shipping costs.