Designing Online Selling Mechanisms: Transparency Levels and Prices

Publication Type

Journal Article

Publication Date

2008

Abstract

Sellers increasingly compete with innovative Internet-based selling mechanisms, revealing or concealing market information. Transparency strategy involves design choices by firms that influence the availability and accessibility of information about products and prices. We develop decision support models for suppliers to set prices for online mechanisms with different transparency levels. We then empirically analyze the price levels set by airlines across transparent and opaque online travel agencies. Our results suggest that airlines can increase profit by increasing price differentials or influencing OTA transparency differences. We also discuss application generality and limitations of our results.

Keywords

Airline industry, Analytical model, Decision support, Demand, Economics of information systems, Electronic commerce, Market transparency, Pricing, Online travel agencies

Discipline

Computer Sciences | E-Commerce

Research Areas

Information Systems and Management

Publication

Decision Support Systems

Volume

45

Issue

4

First Page

729

Last Page

745

ISSN

0167-9236

Identifier

10.1016/j.dss.2007.12.005

Publisher

Elsevier

Additional URL

http://dx.doi.org/10.1016/j.dss.2007.12.005

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