The benefits of downstream information acquisition

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

143 Scopus Citations
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Author(s)

Detail(s)

Original languageEnglish
Pages (from-to)457-471
Journal / PublicationMarketing Science
Volume28
Issue number3
Publication statusPublished - May 2009
Externally publishedYes

Abstract

This study investigates the effects of turning terabytes of raw retail data into managerial insights (i.e., downstream information acquisition) in a strategic channel setting. Two effects of information acquisition are identified - the efficiency effect that improves retail pricing decision making in an uncertain environment, and the strategic effect whereby the retailer voluntarily discloses the acquired private information to influence the upstream manufacturer's wholesale pricing behavior. It is shown that the efficiency effect benefits the retailer without affecting the manufacturer, while the strategic effect works to the detriment of the retailer but to the advantage of the manufacturer. Nevertheless, unobservable information acquisition can mitigate the retailer's loss and the manufacturer's benefit from the strategic effect of information disclosure. Moreover, an increasing expected information acquisition cost may benefit the retailer, when that cost is low and information acquisition is unobservable to the manufacturer. The implications of this paper can shed light on how firms interact in a channel where the downstream market is data intensive, but information gleaning is costly. © 2009 INFORMS.

Research Area(s)

  • Disclosure, Distribution channel, Information acquisition, Voluntary information sharing

Bibliographic Note

Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].

Citation Format(s)

The benefits of downstream information acquisition. / Guo, Liang.
In: Marketing Science, Vol. 28, No. 3, 05.2009, p. 457-471.

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review