Journal
ENTERPRISE INFORMATION SYSTEMS
Volume 16, Issue 3, Pages 445-471Publisher
TAYLOR & FRANCIS LTD
DOI: 10.1080/17517575.2020.1802515
Keywords
Smart-X system; customer privacy; perceived service value; service differentiation; provider competition
Categories
Funding
- National Natural Science Foundation of China [71571043]
- University of International Business and Economics [17JQ06]
- Fundamental Research Funds for the Central Universities in UIBE [CXTD11-04]
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This paper investigates the impact of privacy concerns on customers' purchasing decisions and service providers' pricing strategies. The research finds that customers' privacy costs and service differentiation determine the pricing decisions and market positions of service providers. This has practical implications for specialized product markets that require pre- and post-purchase services.
This paper investigates the impact of privacy concerns on customers' purchasing decisions and service providers' pricing strategies in Smart-X systems. We develop profit maximisation models to test purchasing decisions and pricing strategies of advanced and basic services in monopoly and competitive markets. We find customers' privacy costs and service differentiation determine each service provider's pricing decision and their relative market position. In asymmetrical competition markets, service providers can only coexist when the degree of service differentiation is moderate. These findings have practical implications for the increasingly competitive global markets of specialised products that require pre- and post-purchase services.
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