The Efficiency of the Marketplace Strategies in Electronic Commerce Markets for Experience Goods

The recent trends towards digitalization have provided a spur to the electronic commerce. Meanwhile, initially considered to alleviate search costs, the abundance of the poorly verifiable information on the Internet poses additional challenges to consumer search. These changes appear to enlarge the concept of experience goods. Generally associated with high information uncertainty, the equilibria of trade in this category of merchandise are now subject not only to the probable sellers’ miscommunication regarding quality, but also the search intermediary’s strategy. Aiming at identifying the consequences of these trends, the study contributes to the research in the sphere of choice under information asymmetry. The study proposes a model describing the decision-making of the electronic commerce markets’ participants in the specific environment of trade in experience goods. Inter alia, the model accounts for the consumers’ unequitable degree of sophistication, the sellers’ reputational concerns and the institutional search intermediary’s opportunity to establish the game rules. The patterns of decision making revealed by the model are supposed to be of interest for as the platforms, so the users thereof, sellers and consumers alike. Key words: experience goods, consumer search, lying costs, search intermediary, electronic commerce.