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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/27809
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| Title: | Intelligent agents in electronic markets for information goods:
customization, preference revelation and pricing |
| Authors: | Aron, Ravi
Sundararajan, Arun
Viswanathan, Siva |
| Keywords: | ecommerce
digital goods
dynamic pricing
automated pricing
discrimination
mass customization
pricebot
information filtering
shopbot
software agents
price discrimination
first-degree price |
| Issue Date: | 2005 |
| Publisher: | Decision Support Systems |
| Series/Report no.: | CeDER-PP-2005-07 |
| Abstract: | Electronic commerce has enabled the use of intelligent agent
technologies that can evaluate buyers, customize products, and price in
real-time. Our model of an electronic market with customizable products
analyzes the pricing, profitability and welfare implications of
agent-based technologies that price dynamically based on product
preference information revealed by consumers. We find that in making the
trade-off between better prices and better customization, consumers
invariably choose less-than-ideal products. Furthermore, this trade-off
has a higher impact on buyers on the higher end of the market and causes
a transfer of consumer surplus towards buyers with a lower willingness
to pay. As buyers adjust their product choices in response to better
demand agent technologies, seller revenues decrease since the gains from
better buyer information are dominated by the lowering of the total
value created from the transactions. We study the strategic and welfare
implications of these findings, and discuss managerial and technology
development guidelines. |
| URI: | http://hdl.handle.net/2451/27809 |
| Appears in Collections: | CeDER Published Papers
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