Product Information Websites: Are They Good for Consumers?

Journal of Management Information Systems, Forthcoming

40 Pages Posted: 26 Jul 2014 Last revised: 16 Sep 2016

See all articles by Panos Markopoulos

Panos Markopoulos

University of Cyprus

Ravi Aron

University of Southern California - Marshall School of Business

Lyle Ungar

University of Pennsylvania

Date Written: August 1, 2016

Abstract

Product information websites have become ubiquitous in supporting B2C E-Commerce. This paper explores their impact on firm profitability, consumer surplus, and social welfare. Using an analytical model, we show that firms take advantage of such infomediaries and reduce their own information investments, increasing their profitability. Surprisingly, we find that the existence of these websites may actually reduce social welfare. Contrary to the common belief that product information websites are good for buyers, we show that they may be hurting consumers, even when they seek to maximize consumer surplus as their principal goal. These findings question the uncritical acceptance of infomediaries as beneficial to markets in general, and buyers in particular, especially when the infomediaries assume roles than substitute the information disclosure investments that sellers freely choose to make.

Keywords: Product Information, Information Dissemination, Electronic Markets, Information Economics, B2C eCommerce

JEL Classification: C72, D42, D82, D83, L19

Suggested Citation

Markopoulos, Panos and Aron, Ravi and Ungar, Lyle, Product Information Websites: Are They Good for Consumers? (August 1, 2016). Journal of Management Information Systems, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2470624 or http://dx.doi.org/10.2139/ssrn.2470624

Panos Markopoulos (Contact Author)

University of Cyprus ( email )

75 Kallipoleos Street
Nicosia CY 1678, Nicosia P.O. Box 2
Cyprus

Ravi Aron

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA California 90089
United States

Lyle Ungar

University of Pennsylvania

Philadelphia, PA 19104
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
130
Abstract Views
779
rank
264,636
PlumX Metrics