Does Information Undermine Brand? Information Intermediary Use and Preference for Branded Web Retailers / Joel Waldfogel, Lu Chen.

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Waldfogel, Joel

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w9942.Publication details: Cambridge, Mass. National Bureau of Economic Research 2003.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Investments in brand provide one method for vendors to become known and convince potential customers that vendors will deliver as promised. Alternatively, third-party information on retailers' existence, as well as whether they tend to keep their commitments can serve a similar function and may undermine investments in brand. This study uses a 13-month panel dataset on 1998-99 Internet shopping behavior and use of information intermediaries by over 30,000 households to examine whether information use undermines brand. We find that individuals who take up using price comparison sites reduce their shopping at a broad group of branded retailers by about a tenth. Users of pure price comparison sites, such as DealTime and mySimon, also reduce their Amazon by about a tenth, while individuals using BizRate, which provides both price comparison and vendor reliability information, reduce their Amazon shopping by a fifth. The results have possible implications for both firm strategy and the evolution of market structure. If information weakens the pull of brand, then Internet retailing may grow less concentrated over time.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w9942 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w9939 Optimal Inflation Targeting Rules /	nber w9940 The Terms of Trade and Economic Growth in the Periphery 1870-1938 /	nber w9941 Changes in the Process of Aging During the Twentieth Century: Findings and Procedures of the Early Indicators Project /	nber w9942 Does Information Undermine Brand? Information Intermediary Use and Preference for Branded Web Retailers /	nber w9943 The Aftermath of Hamilton's "Report on Manufactures" /	nber w9944 Trade Disruptions and America's Early Industrialization /	nber w9945 Incomplete Contracts and the Product Cycle /	Next

September 2003.

Investments in brand provide one method for vendors to become known and convince potential customers that vendors will deliver as promised. Alternatively, third-party information on retailers' existence, as well as whether they tend to keep their commitments can serve a similar function and may undermine investments in brand. This study uses a 13-month panel dataset on 1998-99 Internet shopping behavior and use of information intermediaries by over 30,000 households to examine whether information use undermines brand. We find that individuals who take up using price comparison sites reduce their shopping at a broad group of branded retailers by about a tenth. Users of pure price comparison sites, such as DealTime and mySimon, also reduce their Amazon by about a tenth, while individuals using BizRate, which provides both price comparison and vendor reliability information, reduce their Amazon shopping by a fifth. The results have possible implications for both firm strategy and the evolution of market structure. If information weakens the pull of brand, then Internet retailing may grow less concentrated over time.