Negative price premium effect in online market—The impact of competition and buyer informativeness on the pricing strategies of sellers with different reputation levels
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摘要
Motivated by the contradictory findings in literature regarding whether high-reputation sellers enjoy a price premium over low-reputation sellers, this paper examines the pricing strategies of sellers with different reputation levels. We find that a negative price premium effect (i.e., a high-reputation seller charges a lower price than a low-reputation seller) exists due to: (1) the presence of both informed and uninformed buyers, which makes sellers follow mixed pricing strategies. It is then possible for a high-reputation seller setting a lower price than a low-reputation seller. Moreover, when the proportion of informed buyers exceeds a certain threshold, the expected price of a high-reputation seller is even lower than that of a low-reputation seller; (2) the competition among the sellers, which reduces the high-reputation sellers' prices but increases the low-reputation sellers' prices. Consequently, a high-reputation seller is more likely to charge a lower price than a low-reputation seller when the competition intensifies. Our empirical findings also support our theoretical results on the negative price premium effect.
论文关键词:Negative price premium effect,Seller reputation,Buyer informativeness,Competition,Pricing strategy
论文评审过程:Received 25 July 2011, Revised 24 June 2012, Accepted 17 August 2012, Available online 30 August 2012.
论文官网地址:https://doi.org/10.1016/j.dss.2012.08.013