Can ETailers Benefit from Providing Rich Information?

Abstract

Price competition in electronic markets is intense, and how to obtain positive price premium becomes a hot issue. According to Economics of Information (EOI) theory, eTailers should hide more sensitive information increase search cost and consequently to decrease consumerspsila price sensitivity. In contrast, signal theory suggests that providing rich information is an effective signal for eTailers to enhance consumerspsila trust and purchase intention. This research combines the two competitive theories to explore how eTailerspsila information provision about their products influences consumerspsila cognition and productspsila price premium in electronic markets. The results indicate that providing more information can lead to higher price premium.