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Technology Stocks : Booking Holdings (formerly Priceline)
BKNG 5,051+1.9%3:22 PM EST
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To: H James Morris who wrote (2189)1/29/2000 5:47:00 PM
From: PeterGx  Read Replies (1) of 2743
 
James -
Great article! Thanks!

Towards the end of the article, professor Miller actually spells out the recipe under which Priceline.com's service is most effective for consumer, namely - do preliminary research to figure out how low a price is available at the market place and then bid below that, continuously incrementing the bid up until it si accepted (or jump over to alternative sources that have posted a lower price in a traditional way, ie retail / auction, etc.)
This is the case if lowest price if the optimum goal of the consumer. I believe that Priceline's type of service provides utility to consumers beyond finding the lowest price. After all, the right price is not necessarily the lowest price - but it always is the price a consumer is willing to pay. There could be considerable expenses (not necessarily monetary) in locating the absolute lowest price.
Mathematically, it should become statistically impossible to locate the absolute lowest price. The closer one gets to finding it the higher the expected cost associated with the process...Anyway.. to cut a long story short, when used in combination with alternative sources Priceline.com's services provide an excellent shopping option for utility maximizing consumers.
Just another quick comment, if PCLN was making just one side happy (ie sellers or buyers) then their business model will not be viable in the long run - as their reach grows they will tend to cannibalize themselves out of the market.
It is good that both Sellers and Consumers are happy. That is why PCLN should do good as a company
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