The advent of the internet and the on-line book trade: The role of managerial cognition and the liabilities of experience
Article
Weinstein, M, Standifird, SS. (2010). The advent of the internet and the on-line book trade: The role of managerial cognition and the liabilities of experience
. 9(1), 15-40.
Weinstein, M, Standifird, SS. (2010). The advent of the internet and the on-line book trade: The role of managerial cognition and the liabilities of experience
. 9(1), 15-40.
This paper examines the role of managerial cognition in shaping the competitive responses of Internet retailers in the used and out-of-print book trade. Using a unique data set that combines self-reported data from 1,926 booksellers with independently reported credit card sales data, the paper reports on the relationship among pricing strategies, experience in the industry, and sales. This analysis indicates pricing strategies vary by the experience of the seller, and that new market entrants were more likely to use the Internet not only as a sales channel but also as an information resource guiding pricing. Those practices more common among least experienced sellers were positively related to sales, suggesting there could be liabilities to experience for storefront book retailers who launch on-line businesses. The dominant logic, shared among experienced booksellers, limited the ability of more experienced firms to recognize, evaluate, and respond to fundamental changes in their competitive environment.
