TITLE

Firm Strategies in the "Mid Tail" of Platform-Based Retailing

AUTHOR(S)
Jiang, Baojun; Jerath, Kinshuk; Srinivasan, Kannan
PUB. DATE
September 2011
SOURCE
Marketing Science;Sep/Oct2011, Vol. 30 Issue 5, p757
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
While millions of products are sold on its retail platform, Amazon.com itself stocks and sells only a very W small fraction of them. Most of these products are sold by third-party sellers who pay Amazon a fee for each unit sold. Empirical evidence clearly suggests that Amazon tends to sell high-demand products and leave long-tail products for independent sellers to offer. We investigate how a platform owner such as Amazon, facing ex ante demand uncertainty, may strategically learn from these sellers' early sales which of the "mid-tail" products are worthwhile for its direct selling and which are best left for others to sell. The platform owner's "cherry-picking" of the successful products, however, gives an independent seller the incentive to mask any high demand by lowering his sales with a reduced service level (unobserved by the platform owner). We analyze this strategic interaction between a platform owner and an independent seller using a gametheoretic model with two types of sellers--one with high demand and one with low demand. We show that it may not always be optimal for the platform owner to identify the seller's demand. Interestingly, the platform owner may be worse off by retaining its option to sell the independent seller's product, whereas both types of sellers may benefit from the platform owner's threat of entry. The platform owner's entry option may reduce consumer surplus in the early period, although it increases consumer surplus in the later period. We also investigate how consumer reviews influence the market outcome.
ACCESSION #
66564874

 

Related Articles

  • Introduction: advances in E-business engineering. Xu, Shoubo; Xu, Li; Basl, Josef // Information Technology & Management;Dec2012, Vol. 13 Issue 4, p201 

    An introduction is presented in which the author discusses several topics related to e-business that are covered in the issue which includes management of e-business, research and practice in e-business engineering and internet of things.

  • Direct marketing's growth will be global. Gorenstein, Alan K. // Marketing News;12/07/98, Vol. 32 Issue 25, p15 

    Predicts a growth in direct marketing in the United States. Development of sophisticated electronic marketing channels as the primary focus of most direct marketing professionals; Finding and using of the most financially effective methods feasible to increase market share and profits as the...

  • Throwing the Book at Ma Bell. Levey, Richard H. // Direct;Jan2004, Vol. 16 Issue 1, p25 

    Presents an article about direct marketing.

  • news.  // Precision Marketing;10/18/2002, Vol. 15 Issue 4, p5 

    Presents news items on the direct marketing industry in Great Britain,a s of October 18, 2002. Opportunity given by the WHSmith for other mailers to have an access to its Clubcard database; Online recruitment campaign launched by the Royal Mail and the Parcelforce Worldwide to encourage...

  • If It's Junk Mail, Why Did It Generate $430 Billion In Sales? Boal, Jonathan // Business Journal (Central New York);05/14/99, Vol. 13 Issue 19, p11 

    Defends the United States direct mail business from allegations that it is just junk mail. $430 billion in sales in 1998; Growth forecast; Benefits of direct mail.

  • Industry must keep pace with public concerns. Mitchell, Alan // Precision Marketing;12/21/2001, Vol. 14 Issue 13, p14 

    Discusses how the direct marketing sector in Great Britain can keep pace with public concerns. Ways in which companies can obtain information about their customers.

  • Big guns join the revolution. McKelvey, Charlie // Precision Marketing;12/21/2001, Vol. 14 Issue 13, p15 

    Emphasizes the emergence of direct marketing in Great Britain. Techniques in direct marketing; List of companies focusing on direct marketing; Concerns on privacy in telemarketing.

  • Listline.  // Direct;2/1/2007, Vol. 19 Issue 2, p35 

    A directory for direct marketing resources is presented.

  • GLOSSARY.  // Direct;7/1/2006, Vol. 18 Issue 8, ps13 

    A glossary of jargon related to direct marketing is presented.

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics