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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/14309
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| Title: | Impact of Search Engine Characteristics on Electronic Markets and
Sellers' Pricing Strategies |
| Authors: | Aron, Ravi |
| Issue Date: | 10-Jan-1999 |
| Publisher: | Stern School of Business, New York University |
| Series/Report no.: | IS-98-26 |
| Abstract: | Internet-based electronic markets facilitate buyer search for seller
offerings and comparison of products on the basis of price and product
features. Search engine capabilities such as Recall, Precision and
Ranking Accuracy determine the efficiency with which buyers can search
for and compare products and the resulting buyer surplus and seller
profits. This research investigates the impact of each of these factors
on buyer and seller strategies at equilibrium. This paper explains
certain counter intuitive market phenomena where some successful
electronic markets offer less choice to buyers than their competitors.
The analysis is driven by a set of analytical models of an electronic
market under varying conditions of sellers' market shares, buyer search
strategies and search engine technology. The models developed here draw
from existing theories in information economics and computer science.
The results demonstrate that precision has a greater direct impact on
buyer surplus than recall and that buyers will forego some choice in
exchange for greater accuracy of product description, especially in
products that are complex or are characterized by ambiguity in product
description and terms of trade. Finally, the seller with the greatest
market share stands to gain most from offering search engine services to
buyers and in a market characterized by two or more sellers with
significant market shares, search engine services will always be offered
free of cost to buyers. |
| URI: | http://hdl.handle.net/2451/14309 |
| Appears in Collections: | IOMS: Information Systems Working Papers
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