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| Author: | Thompson, M.S. Thompson, S. |
| Title: | Pricing in a market without apparent horizontal differentiation: Evidence from web hosting services |
| Journal: | Economics of innovation and new technology
2006 : OCT, VOL. 15:7, p. 649-663 |
| Index terms: | United Kingdom USA information technology service pricing markets |
| Freeterms: | horizontal differentiation WWW |
| Language: | eng |
| Abstract: | In this article, explored is pricing in a product without the conventional attributes of horizontal differentiation (here as: h-diff.), that is, physical location, design, color, etc., and whose vertical characteristics (as: chars.) are precisely specified allowing rapid imitation. Web hosting exhibits low entry barriers, high turnover and low concentration. Based on electronically collected database covering more than 17.500 U.S. and U.K. product offerings, it is found that after controlling for quality reputation and e-visibility chars. exert a strong positive impact on price. This result from a heterogeneous B2B market, without h-diff., complements homogeneous B2C research elsewhere in suggesting that price disparities persist, even in ultra-competitive electronic markets (e-markets). |
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