PRICE SETTING BEHAVIOR IN AN ONLINE MARKET

Fiskara Indawan (), Aryo Sasongko () and Dian Rahmawati ()
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Fiskara Indawan: Bank Indonesia Institute
Aryo Sasongko: Bank Indonesia Institute
Dian Rahmawati: Bank Indonesia Institute

Bulletin of Monetary Economics and Banking, 2023, vol. 26, issue 2, 192-220

Abstract: TWe study price-setting behavior in the Indonesian online market before and during the COVID-19 pandemic. We surveyed 297 online and offline markets dominated by micro and small enterprises (MSEs). The results show that the online market’s price-setting behaviors apply state dependent pricing rules and price discrimination, evaluate prices more than once a year based on current information, and immediately respond to a shock. The main factor for price changes is input cost change. Meanwhile, price rigidities are influenced by implicit contracts. The probit model shows online markets face the high-competitive market, not applying a rule of thumb pricing, and frequently changing prices regarding shock.

Keywords: Online market; Price setting; Price changes; Price adjustments (search for similar items in EconPapers)
JEL-codes: D40 E31 G21 G28 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:26:y:2023:i:2a:p:192-220

DOI: 10.59091/1410-8046.2065

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