Online Shopping and Platform Design with Ex Ante Registration Requirements

Florian Morath and Johannes Münster ()
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Johannes Münster: University of Cologne, 50923 Köln, Germany

Management Science, 2018, vol. 64, issue 1, 360-380

Abstract: We study platform design in online markets in which buying involves a (nonmonetary) cost for consumers caused by privacy and security concerns. Firms decide whether to require registration at their website before consumers learn relevant product information. We derive conditions under which a monopoly seller benefits from ex ante registration requirements and demonstrate that the profitability of registration requirements is increased when taking into account the prospect of future purchases or an informational value of consumer registration to the firm. Moreover, we consider the effectiveness of discounts (store credit) as a means to influence the consumers’ registration decision. Finally, we confirm the profitability of ex ante registration requirements in the presence of price competition.

Keywords: e-commerce; privacy concerns; security concerns; registration cost; platform design; monopoly; price competition; information; digital transformation (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (4)

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https://doi.org/10.1287/mnsc.2016.2595 (application/pdf)

Related works:
Working Paper: Online Shopping and Platform Design with Ex Ante Registration Requirements (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:64:y:2018:i:1:p:360-380

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