Information Availability and Consumer Preference: Can Online Retailers Benefit From Providing Access to Competitor Price Information?

This paper examines consumers ’ reactions to the provision of direct access to uncensored competitor price information within an electronic store. Based on notions derived from signaling theory, prior research on trust, and attribution theory, we propose that the facilitation of such access may have a positive impact on consumer preference for an online retailer. Furthermore, we predict that this effect will be moderated by how attractive a vendor’s prices are. The results of a laboratory experiment demonstrate the possibility that a retailer’s act of providing access to uncensored competitor price information may result in enhanced long-term preference for that vendor, especially if the latter’s prices are neither clearly superior nor obviously inferior to those of its competitors. Finally, this positive effect of facilitating access to competitors ’ prices on consumer preference is mediated by the perceived trustworthiness of the online retailer. Information Availability and Consumer Preference 1 From a consumer’s perspective, one of the most important advantages of Internet-based electronic shopping environments relative to traditional, bricks-and-mortar retail settings is the drastically reduced cost of search for information about market offerings (see, e.g., Bakos 1997; Häubl and Trifts 2000). Performing tasks such as identifying products for possible purchase and