Voluntary Information Sharing, Retail Pricing and Firm Performance

Abstract: Online information sharing by firms has created an unprecedented amount of data to analyze by researchers. While conclusions from research should be drawn with basis in sound theory, there has also emerged a need to supplement these theoretical considerations with advanced data collection, storage and analysis as well as reporting to decisionmakers. As such, the emergence of the research field of microdata analysis has given aid in the process of gathering large quantities of data and managing databases, analyzing said data with knowledge in advanced areas, e.g., statistical inference, machine learning, artificial intelligence and the like, and presenting the results for decisionmakers and stakeholders in a clear, coherent way while also stating economic consequences to enable decision-making. This dissertation consists of five individual papers contributing to this field of research, and in the process answering a set of questions related to voluntary information sharing, retail pricing, and firm performance.In the first paper, a large-scale data collection of corporate social responsibility reports was coupled with state-of-the-art topic modelling analysis to answer the question who the intended users of these reports are, and the results show that the shareholder perspective is more prominent rather than the stakeholder perspective. The second paper empirically shows the value of having lowest price or highest ratings on a price comparison website, with the former being found to have a profound impact on demand, while the effect of the latter is more unclear. The third paper relies on time series clustering analysis to test if intertemporal price discrimination is the cause of remaining price dispersion in low search cost markets. The empirical evidence rejects an established theory of explaining price dispersion in a wide range of markets characterized by low search costs. The fourth paper provides an investigation into how the increased use of a price comparison website affect pricing. It is found that an increased use of the platform and number of retailers entering lead to a reduction in average prices with substantial consumer savings as the general outcome. Following the results of the third paper, a more likely model to explain the persistent price dispersion in low search cost markets is also presented. The fifth and final paper combines two datasets with rigorous statistical analysis to answer why firms compete on price comparison websites, despite the threat of increased competition and reductions in prices. The results show that retailers competing on price comparison websites increase their productivity which creates increased profits that are shared between shareholders and employees. The different types of information sharing studied in this thesis is thus found to have profound impact on consumers, firms and society at large.