The advent of the internet has revolutionized the way people buy and sell. The internet is characterized by increased access to information. This increased information should foster convergence to the “law of one price,” for homogenous goods. The surge of electronic markets has motivated a stream of research focusing on comparing the efficiency of the internet market to the traditional one. This dissertation contributes to the existing literature of consumer search behavior in electronic markets and its effects on the price level and dispersion in the market more generally. A part of this dissertation assesses the direct and indirect effect of increased internet usage on the prices of airline tickets, using a unique contemporaneous online and offline transaction data for airline tickets, covering the final quarter of 2004. The study also investigates the relationship between increased internet usage and price dispersion in the market for airline tickets. This study also includes an exhaustive set of controls for airline ticket characteristics, namely refundability, advance purchase requirements, travel and stay restrictions, class of travel, departure and return day of the week and time, flight level load factor along with other market structure data used in the standard airlines literature. The existing theoretical literature in consumer search extended to the electronic markets assumes, for simplicity, that all consumers in the internet markets are the “searchers,” looking for the lowest price. The internet, however, also plays the role of a convenient shopping medium for a group of consumers whose primary motivation is not to search for the lowest price. The contemporary literature incorrectly categorizes these consumers as the traditional searchers. The remaining part of this dissertation provides a modification to the existing theoretical models of consumer search to accommodate both searchers and non-searchers in each of the electronic and traditional markets and derive the implications of the increased internet usage on the average level of prices and price dispersion in a market selling a homogenous good.

An often mentioned reason for consumers not purchasing from Internet vendors, is the lack of trust. The lack of physical clues and physical interaction in the online environment make it more difficult to establish trust with the consumers. So, it is important for companies to learn how to manage consumers’ trust in e-commerce. Although, building consumer trust on the Internet is a challenge for online vendors. The purpose with this dissertation was to get a better understanding of consumer trust in e-commerce. We wanted to find important factors that help to establish consumer trust in e-commerce. These factors guided our empirical research, in which our purpose was to investigate how consumers perceive the importance of some selected factors, for them to feel trust to purchase online. We chose to use a survey as our research strategy and the primary data was collected through a questionnaire. We found that there are many factors that help establish trust, which are relevant for the consumers when purchasing online. Security and privacy are factors that are of great importance for the consumers to feel trust, to purchase online. Businesses are not able to directly control the trust their customers feel. They can just build environments that encourage people to feel trust. A marketplace can be trustworthy, but the participants have to feel the trust before the marketplace can be trusted.

An often mentioned reason for consumers not purchasing from Internet vendors, is the lack of trust. The lack of physical clues and physical interaction in the online environment make it more difficult to establish trust with the consumers. So, it is important for companies to learn how to manage consumers’ trust in e-commerce. Although, building consumer trust on the Internet is a challenge for online vendors. The purpose with this dissertation was to get a better understanding of consumer trust in e-commerce. We wanted to find important factors that help to establish consumer trust in e-commerce. These factors guided our empirical research, in which our purpose was to investigate how consumers perceive the importance of some selected factors, for them to feel trust to purchase online. We chose to use a survey as our research strategy and the primary data was collected through a questionnaire. We found that there are many factors that help establish trust, which are relevant for the consumers when purchasing online. Security and privacy are factors that are of great importance for the consumers to feel trust, to purchase online. Businesses are not able to directly control the trust their customers feel. They can just build environments that encourage people to feel trust. A marketplace can be trustworthy, but the participants have to feel the trust before the marketplace can be trusted.

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The advent of the internet has revolutionized the way people buy and sell. The internet is characterized by increased access to information. This increased information should foster convergence to the “law of one price,” for homogenous goods. The surge of electronic markets has motivated a stream of research focusing on comparing the efficiency of the internet market to the traditional one. This dissertation contributes to the existing literature of consumer search behavior in electronic markets and its effects on the price level and dispersion in the market more generally. A part of this dissertation assesses the direct and indirect effect of increased internet usage on the prices of airline tickets, using a unique contemporaneous online and offline transaction data for airline tickets, covering the final quarter of 2004. The study also investigates the relationship between increased internet usage and price dispersion in the market for airline tickets. This study also includes an exhaustive set of controls for airline ticket characteristics, namely refundability, advance purchase requirements, travel and stay restrictions, class of travel, departure and return day of the week and time, flight level load factor along with other market structure data used in the standard airlines literature. The existing theoretical literature in consumer search extended to the electronic markets assumes, for simplicity, that all consumers in the internet markets are the “searchers,” looking for the lowest price. The internet, however, also plays the role of a convenient shopping medium for a group of consumers whose primary motivation is not to search for the lowest price. The contemporary literature incorrectly categorizes these consumers as the traditional searchers. The remaining part of this dissertation provides a modification to the existing theoretical models of consumer search to accommodate both searchers and non-searchers in each of the electronic and traditional markets and derive the implications of the increased internet usage on the average level of prices and price dispersion in a market selling a homogenous good.

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This dissertation examines the innovations in electronic commerce and their managerial impacts. In the first essay, we investigate the importance of product and retailer uncertainty in a customer's online purchase decision as well as the uncertainty-reduction effects of retailer characteristics. In the second essay, we examine online pricing strategies of B2C retailers, with an aim to understand whether and how the driving factors of price dispersion evolve over time. Based on the theories of resource-based view (RBV), IT business value, and competitive dynamics, the third essay examines the factors that affect cross-channel capabilities and competitive actions in the apparel industry in the U.S.

Issued also as Thesis (Ph. D.)--Columbia University. / Bibliography: p. 162-164.