Pricing price information in e-commerce

ABSTRACT

Shopbots and Internet sites that help users locate the best price for a product are changing the way people shop by providing valuable information on goods and services. This paper presents a first attempt to measure the value of one piece of information: the price charged for goods and services. We first establish a theoretical limit to the value of price information for the first seller in a market that decides to sell price information to a shopbot and quantify the revenues that the seller can expect to receive. We then proceed to discuss whether and how much of this theoretical value can actually be realized in equilibrium settings.

REFERENCES

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INDEX TERMS

Primary Classification:
  K. Computing Milieux
  K.4 COMPUTERS AND SOCIETY
      K.4.4 Electronic Commerce

Additional Classification:
  F. Theory of Computation
  F.1 COMPUTATION BY ABSTRACT DEVICES
      F.1.2 Modes of Computation
          Subjects: Probabilistic computation

  J. Computer Applications
  J.4 SOCIAL AND BEHAVIORAL SCIENCES
      Subjects: Economics

General Terms:
Economics, Performance, Theory

Keywords:
e-commerce, information value, price dispersion, shopbots