Competitive reasons for the Name-Your-Own-Price channel

Research output: Contribution to journalArticle

26 Scopus citations

Abstract

This paper shows that the Name-Your-Own-Price (NYOP) business model can help soften competition. When consumers differ in their frictional costs (i.e., the shopping hassle) they experience when bidding at an NYOP retailer, the NYOP format can be a mechanism for differentiating a retailer from a posted-price rival. Beyond providing a motivation for using an NYOP mechanism, competition also has important implications for the optimal structure of the NYOP format. For example, this paper shows that prohibiting rebidding may benefit an NYOP firm by reducing price rivalry.

Original languageEnglish (US)
Pages (from-to)277-293
Number of pages17
JournalMarketing Letters
Volume20
Issue number3
DOIs
StatePublished - Jun 1 2009

Keywords

  • Name-Your-Own-Price
  • Pricing
  • Reverse auctions

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics
  • Marketing

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