| This dissertation investigates the impact of online product information on consumers, firms and markets. The first chapter of this dissertation proves that better access to product information increases consumer demand and their willingness-to-pay, leading to a new era where firms can charge higher prices and where consumers are empowered with more choices and information to make better decisions.; One of the major difficulties in studying descriptive product information is its immeasurability. Unlike price information, which can be easily quantified, descriptive product information has many dimensions that are not subject to clear definition or to the control that is often needed in empirical research. The second and third chapters of this dissertation provide two approaches for empirical research on descriptive product information.; The second chapter studies whether online product information increases consumer demand. However, as long as a consumer' likelihood of searching for information is correlated with his demand for music CDs, a direct comparison between the two groups of consumers will yield biased results. This chapter employs a simultaneous equation model to explicitly model both consumer demand for music CDs and consumers' search for online product information. The result proves product information does increase consumer demand. Equally important, however, the result shows that ignoring the self-selection issue will dramatically overestimate the potential impact.; The third chapter examines the impact of third-party ratings of online bookstores' service quality on consumer loyalty to those bookstores. Adopting a different approach from the second chapter, we consider a case where information is provided exogenously. Using the aggregative market share model and the individual consumer discrete choice model, the third chapter shows that consumer loyalty in online book retailing environment is mainly due to lack of information of service quality. |
