E-Commerce Ch. 11

Online Social Network

Involves a group of people, shared social interaction, common ties, and people who share an area for some period of time.

General Communities

Offer opportunities to interact with general audience organized into general topics.

-Advertising by selling ads on pages and videos

Practice Networks

Offer focused discussion groups, help, and knowledge related to an area of shared practice.

-May be profit or non-profit

Interest-based social networks

Offer focused discussion groups based on shared interest in some specific subject.

-Usually advertising supported

Affinity Communities

Offer focused discussion and interaction with other people who share same affinity (self or group identification).

-Advertising and revenues from sales of products

Sponsored Communities

Created by government, nonprofit, or for-profit organizations for purpose of pursuing organizational goals.

Online Auctions

Are the most popular C2C sites on the Internet.

-eBay is the market leader

Dynamic Pricing

Prices based on demand characteristics of customer and supply situation of seller.

Types of dynamic pricing

1. Bundling

2. Trigger pricing

3. Utilization pricing

4. Personalization pricing

Liquidity

Sellers can find willing buyers, and buyers can find sellers.

Price discovery

Buyers and sellers can quickly and efficiently develop prices for items that are difficult to assess, where the price depends on demand and supply, and where the product is rare.

Price Transparency

Public Internet auctions allow everyone in the world to see the asking and bidding prices for items.

Market Efficiency

Auctions can, and often do, lead to reduced prices, and hence reduced profits for merchants, leading to an increase in consumer welfare-one measure of market efficiency.

Lower transaction costs

Online auctions can lower the cost of selling and purchasing products, benefiting both merchants and consumers.

Consumer aggregation

Sellers benefit from large auction sites' ability to aggregate a large number of consumers who are motivated to purchase something in one marketspace.

Network effects

The larger an auction site becomes in terms of visitors and products for sale, the more valuable it becomes as a marketplace for everyone.

Uniform pricing rule

Multiple winners who all pay the same price.

Discriminatory pricing rule

Winners pay different amount depending on what they bid.