Faculty of Economics and Business Administration Publications Database

Shopbots and Information Quality - Retailers' Strategies for Price Concealment

Frischmann, Tanja
Link External Source: Online Version
Year: 2008

ShopBots allow consumers to compare product offerings of online retailers and can thereby significantly reduce consumers' search costs. Although it was expected that these comparisons would pull prices down to a single market price, prices in online markets have not even come close to those expectations. In this paper we show how retailers influence the quality of data and thereby successfully pursue strategies making products and prices hardly comparable. We find a notable amount of bundles in highly competitive product categories and show how retailers exploit consumers' biased perception in terms of partitioned prices. Finally, we argue that with recent business models, it is very unlikely that ShopBots fulfil the promise of market transparency.