BUSINESSWEEK ONLINE : NOVEMBER 20, 2000 ISSUE
NEWS: ANALYSIS & COMMENTARY

Drawback of Price-Setting Innovations


The Internet makes it easier to abandon seller-posted pricing, but negotiating has its disadvantages:

INCONVENIENCE
Many customers don't want to take the time to bid or haggle, especially when the stakes are low

UNFAIRNESS
Customers may resent paying more than someone else for an identical item

DISLOYALTY
Auctions and other mechanisms make customers focus on price comparisons, reducing brand loyalty



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RELATED ITEMS
A Revolution in Pricing? Not Quite

TABLE: Drawback of Price-Setting Innovations

Commentary: Priceline Should Buy Priceline

TABLE: Priceline's Advantage



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