Portal de Periódicos da CAPES

Product Customization and Price Competition on the Internet

2001; RELX Group (Netherlands); Linguagem: Inglês

10.2139/ssrn.283003

1556-5068

Rajiv M. Dewan, Bing Jing, Abraham Seidmann,

Merger and Competition Analysis

The Internet provides an unprecedented capability for sellers to learn about their customers and offer custom products at special prices. Advanced manufacturing technologies have improved sellers' manufacturing flexibility. To examine how these advances affect sellers' products and pricing,we first develop a model of product customization and flexible pricing to incorporate the salient roles of the Internet and flexible manufacturing technologies in reducing the costs of designing and producing tailored consumer goods. A monopoly seller may earn the highest profits by producing both standard and custom products. Surprisingly, the monopoly can raise his prices for both standard and customized products as customization and information collection technologies improve.