Year: 2006
Type: dissertation
Abstract: This dissertation has three parts that study the impact of information technology \non competition and vertical relationships from different perspectives. \nThe first part focuses on an electronic market where product information \nis important for consumers to identify their ideal product and the Internet greatly \nreduces consumers’ search cost. The model studies how reduced search cost influences \nsocial welfare and retailers’ incentive to provide product information. It is \nfound that if technology reduces consumers’ search cost to evaluate products and \ncompare prices, sellers who invest in providing valuable information may not be \nable to recover their investments. Therefore, by lowering sellers’ incentive to prov \nvide product information, reduced search cost may negatively impact social welfare \nas consumers have to search more to identify their ideal product. The study also \nshows that sellers need to develop the capability of, and reputation for, information \nprovision in order to make profits, even though some consumers and sellers may \nfree ride. \nThe second part extends the first model. In the second model, the manufacturer \ndecides whether to distribute products through the electronic or the physical \nchannel, or through both the channels. In the model, different channels have different \nsearch costs for consumers, different abilities to offer product information, and \ndifferent reach to consumers. The model suggests that the manufacturer uses both \nthe channels when product information is very valuable and product information \nis largely about digital attributes, or when the product information is not valuable. \nThe model also suggests that when the manufacturer chooses to sell through both \nthe channels the manufacturer need not sell through the most well-known electronic \nretailer. This part also discusses the case where the manufacture is vertically integrated. \nThat is, the manufacturer itself operates in one of the channels. \nThe third part continues the second part and focuses on firms’ vertical integration \n(VI) strategy. It examines firms included in 1995-1997 InformationWeek \n500 and COMPUSTAT database to study the impact of competitive environment \non how IT affects the level of vertical integration. It is found that the competitive \nenvironment moderates the impact of IT on vertical integration - in more dynamic \nenvironments IT is associated with a decrease in VI, and in more stable environments \nIT is associated with an increase in VI.
Author: Dazhong Wu
Language: English
Field: Decision Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1942655315