We study the pricing strategies of firms providing a service in experience good markets with switching costs. Using data on vendors providing “hosting and related services” at an early stage of the market, we test for pricing distortions that follow from oligopolistic competition with quality uncertainty and switching costs. We find that firms with a brand name charge a premium for their produc...

International Integration, Risk and the Welfare State How does international integration affect the welfare state? Does it call for a leaner or an expanded welfare state? International integration may affect the distortions caused by welfare state activities but also the risks motivating social insurance mechanisms. This paper addresses these potentially counteracting effects in a fully specifi...

A wide spectrum of technologies, producing a vast array of product qualities, coexists in modern markets today. Many of these markets are also characterised by what is commonly known as localized competition that refers to a special industrial structure in which different firms compete directly with different groups of rivals. We explore the endogenous choice of product quality in localized com...

Factors are explored of decision making in regard to buying and/or upgrading information products. Mature information product markets are considered. Comparing two cases professional and final consumer information products the decision making process is considered on the choice of product variant. We distinguish three groups of users according to their ultimate decisions to either not to upgrad...

The electronic market hypothesis (EMH) predicts that by reducing coordination costs, information technology (IT) will shift industrial organization from hierarchical to market-based forms of economic activity. While academic researchers and practitioners have witnessed these shifts with the advent of the Internet, there is little understanding about the process and the underlying forces that dr...

Much of the early research in electronic markets suggested that the proliferation of ecommerce would ultimately threaten the presence of intermediaries in electronic value chains. However, a careful analysis of the structure and functions of electronic marketplaces indicates that intermediaries provide many value-adding functions that cannot be easily substituted or ‘internalised’ through direc...

We examine the relative and complementary effectiveness of trust-building strategies in online environments. While prior research has examined various antecedents to trust, we investigated two trust-building mechanisms more in depth: Web site trust and vendor reputation. We tried to understand the relative effectiveness of these two important mechanisms to provide online businesses with a clear...

European businesses today are showing a significant interest in the concept of business process redesign, not in the least because its advocates promise a dramatic decrease in costs and a similar increase in sales. Since information and communication technology seem to play enabling roles, one can expect electronic markets to be significantly contributing to the effects of business process rede...

Previous research indicated that the performance of interorganizational processes in electronic markets and hierarchies is influenced by eight factors: stakeholders, competition, information technology, market network (re)design, risk, process (re)design, information, and trust. This paper focuses on the inter-organizational processes related to the settlement (clearing) of cross border Euro pa...

Improved consumer addressability in electronic markets allows vendors to send focused promotional messages to specific customers, facilitating a targeted advertising approach that we call “narrowcasting”. We characterize a rational consumer’s market participation decision and identify a narrowcasting firm’s optimal targeting decision when buyers face nontrivial search costs. In the special case...