A strategic analysis of electronic marketplaces
MIS Quarterly - Special issue on the strategic use of information systems
Electronic markets and electronic hierarchies
Communications of the ACM
The emerging role of electronic marketplaces on the Internet
Communications of the ACM
Reducing buyer search costs: implications for electronic marketplaces
Management Science - Special issue: Frontier research on information systems and economics
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
The Landscape of Electronic Market Design
Management Science
Buyer's Efficient E-Sourcing Structure: Centralize or Decentralize?
Journal of Management Information Systems
Information Systems Frontiers
Designing online selling mechanisms: Transparency levels and prices
Decision Support Systems
The Complementary Effects of E-Markets on Existing Supplier-Buyer Relationships in a Supply Chain
Journal of Management Information Systems
Electronic Markets, Search Costs, and Firm Boundaries
Information Systems Research
A review of research on e-marketplaces 1997-2008
Decision Support Systems
Seller Search and Market Outcomes in Online Auctions
Management Science
Donor-to-Nonprofit Online Marketplace: An Economic Analysis of the Effects on Fund-Raising
Journal of Management Information Systems
Oligopolistic Pricing with Online Search
Journal of Management Information Systems
Price Discovery in the U.S. Treasury Market: Automation vs. Intermediation
Management Science
Oligopolistic Pricing with Online Search
Journal of Management Information Systems
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We examine the impact of reduced search costs on prices of commodity products in electronic marketplaces. Conventionally, reduced consumer search costs may be expected to engender stronger price competition between firms, resulting in lower prices and improved consumer welfare. This notion was formalized in Stahl (1989, "Oligopolistic pricing with sequential consumer search," American Economic Review,, Vol. 79, No. 4, pp. 700-712) in a model of static firm competition. In this paper, we show that these standard welfare conclusions may be neutralized or reversed in a dynamic environment. We focus on self-enforcing collusion by firms and characterize the conditions under which collusive equilibria exist. We show that less costly consumer search can facilitate firms' abilities to collude, resulting in higher prices and reduced consumer welfare, even with imperfect or no monitoring by sellers of each other's prices. If the same technology that eases consumer search also allows firms to monitor each other's prices more easily, then firms can more easily detect cheating on a collusive price arrangement, allowing an even greater scope for collusion. This raises antitrust concerns with respect to the electronic marketplace and suggests that at least some of the anticipated competitive gains from electronic market systems may be difficult to realize.