Designing Online Selling Mechanisms: Transparency Levels and Prices
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.
Airline industry, Analytical model, Decision support, Demand, Economics of information systems, Electronic commerce, Market transparency, Pricing, Online travel agencies
Computer Sciences | E-Commerce
Information Systems and Management
Decision Support Systems
GRANADOS, N.; GUPTA, A.; and Kauffman, Robert J..
Designing Online Selling Mechanisms: Transparency Levels and Prices. (2008). Decision Support Systems. 45, (4), 729-745. Research Collection School Of Information Systems.
Available at: http://ink.library.smu.edu.sg/sis_research/2128