Cost-based, competitive, and personalized pricing in online reverse auction markets: An empirical investigation of outsourced it services

Yili Hong, Paul A. Pavlou

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Strategic pricing in online markets has been of much interest to academics and practitioners, particularly for unique IT services. We build upon information signaling and uncertainty theory to examine three primary pricing strategies for providing outsourced IT services: cost-based pricing (accounting for production costs), competitive pricing (accounting for competitors' attributes) and personalized pricing (accounting for buyers' information). We test the respective role of each of these three complementary pricing strategies with archival data from a global online market that specializes in the outsourcing of IT services. The results confirm that, besides cost-based pricing, service providers also account for the information signals of competing providers when pricing their services, while they also personalize their prices for service outsourcers with different quality levels to shield themselves from transaction uncertainty.

Original languageEnglish (US)
Title of host publicationAcademy of Management 2012 Annual Meeting, AOM 2012
PublisherAcademy of Management
Pages335-340
Number of pages6
DOIs
StatePublished - 2012
Externally publishedYes
Event72nd Annual Meeting of the Academy of Management, AOM 2012 - Boston, United States
Duration: Aug 7 2012Aug 10 2012

Other

Other72nd Annual Meeting of the Academy of Management, AOM 2012
CountryUnited States
CityBoston
Period8/7/128/10/12

ASJC Scopus subject areas

  • Management of Technology and Innovation
  • Industrial relations
  • Management Information Systems

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    Hong, Y., & Pavlou, P. A. (2012). Cost-based, competitive, and personalized pricing in online reverse auction markets: An empirical investigation of outsourced it services. In Academy of Management 2012 Annual Meeting, AOM 2012 (pp. 335-340). Academy of Management. https://doi.org/10.5465/AMBPP.2012.159