Commerce depends on buyers and sellers fulfilling their contractual obligations; mechanisms inducing such performance are essential to well-functioning markets. Internet-enabled reputation mechanisms that collect and disseminate consumer feedback have emerged as prominent means for inducing...

Information systems can serve as intermediaries between the buyers and the sellers in a market creating an "electronic marketplace" that lowers the buyers' cost to acquire information about seller prices and product offerings. As a result, electronic marketplaces reduce the inefficiencies caused...

We study the strategy of bundling a large number of information goods, such as those increasingly available on the Internet, and selling them for a fixed price. We analyze the optimal bundling strategies for a multiproduct monopolist, and we find that bundling very large numbers of unrelated...

A cornerstone of the law and economics approach to standard-form contracts is the informed-minority hypothesis: in competitive markets, a minority of term-conscious buyers is sufficient to discipline sellers from using unfavorable boilerplate terms. This argument is often invoked to limit...

The Internet has signi.cantly reduced the marginal cost of producing and distributing digital information goods. It also coincides with the emergence of new competitive strategies such as large-scale bundling. In this paper, we show that bundling can create “economies of aggregation” for...

An important current trend in advertising is the replacement of traditional pay-per-exposure (pay-per-impression) pricing models with performance-based mechanisms in which advertisers pay only for measurable actions by consumers. Such pay-per-action (PPA) mechanisms are becoming the predominant...