Abstract

http://ssrn.com/abstract=2115956
 
 

References (36)



 


 



Using an Online Intermediary as an Additional Channel for Selling Quality Differentiated Services


Mohammad Saifur Rahman


University of Calgary - Haskayne School of Business

Tolga Akcura


Ozyegin University

Zafer D. Ozdemir


Miami University - Farmer School of Business

July 23, 2012


Abstract:     
When deciding whether to utilize an online intermediary in addition to their own distribution channels, quality differentiated service providers face the trade-off between the benefit of extended reach and the threat of increased competition. Using an analytical framework, we analyze when and how service providers may utilize an online intermediary to their advantage in the presence of advance selling (i.e., selling a service at an early date for future consumption). In general, when an online intermediary is used, the competition effect dominates over the reach effect and leads to a falling price over time, which is in line with our empirical observations from the hotel industry. Interestingly, we find that the negative effect of increased competition on profits, due to intermediary usage, can be reversed by committing to self-imposed participation limits (i.e., selling only a predetermined amount of services through the online intermediary). This ensures that the service provider is better off selling through both its own site and the online intermediary, rather than selling exclusively using either channel.

Number of Pages in PDF File: 54

Keywords: online intermediary, internet reach, distribution channels, advance selling, quality differentiation, analytical model

working papers series


Download This Paper

Date posted: July 23, 2012 ; Last revised: July 1, 2014

Suggested Citation

Rahman, Mohammad Saifur and Akcura, Tolga and Ozdemir, Zafer D., Using an Online Intermediary as an Additional Channel for Selling Quality Differentiated Services (July 23, 2012). Available at SSRN: http://ssrn.com/abstract=2115956 or http://dx.doi.org/10.2139/ssrn.2115956

Contact Information

Mohammad Saifur Rahman (Contact Author)
University of Calgary - Haskayne School of Business ( email )
2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada
(403) 220-4276 (Phone)
(403) 282-0095 (Fax)
HOME PAGE: http://haskayne.ucalgary.ca/profiles/mohammad-rahman
Tolga Akcura
Ozyegin University ( email )
Kusbakisi Cd. No: 2
Altunizade, Uskudar
Istanbul, 34662
Turkey
Zafer D. Ozdemir
Miami University - Farmer School of Business ( email )
Oxford, OH 45056
United States
Feedback to SSRN


Paper statistics
Abstract Views: 628
Downloads: 81
Download Rank: 178,482
References:  36

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo3 in 0.515 seconds