Coordinating Prices on Traditional and Internet Channels

Tuesday, September 24, 2002 - 3:00pm - 3:50pm
Keller 3-180
Jayashankar Swaminathan (University of North Carolina, Chapel Hill)
The Internet has provided a new avenue to conduct business for both manufacturers and retailers. Two important decisions that need to be considered are - (1) the degree of independence of the new channel and (2) the pricing of goods across the two channels. In this talk, I will first introduce analysis of a monopolistic retailer and study alternative pricing strategies under different degrees of autonomy for the Internet operations using a micro level consumer utility model for demand generation. Next, I will discuss results considering the same issue from a manufacturer's standpoint who has an existing retail channel. Finally, I will discuss theoretical bounds on the performance using a macro level demand model and provide insights on the pricing by pure and hybrid retailers (having both traditional and internet channel) under competition.