A Study of Pricing Evolution in the Online Toy Market

Zhenlin Yang, Lydia Gan and Fang-Fang Tang
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Lydia Gan: Division of Economics,School of Humanities and Social Sciences, Nanyang Technological University, Singapore
Fang-Fang Tang: Department of Marketing, Faculty of Business Administration, Chinese University of Hong Kong, Hong Kong

No 704, Economic Growth Centre Working Paper Series from Nanyang Technological University, School of Social Sciences, Economic Growth Centre

Abstract: We examine the pricing trends in the online toy markets based on a unique set of panel data collected across three years’ span. The analysis was made through panel data regression models with error components and serial correlation, allowing comparisons of prices and price dispersions between the two types of online retailers as well as examinations of dynamics of prices and price dispersions. Our results indicate that both online branch of multichannel retailers (OBMCRS) and dotcoms charge similar prices on average, and over time their prices move in tandem. Although the OBMCR retailers charge significantly different prices, the dotcoms do charge similar prices. Moreover, both retailer types demonstrate different magnitudes of price dispersion that move at different rates over time. Although the price dispersion of OBMCRS is higher than that of the dotcoms at the beginning, the gap narrows over time.

Keywords: e-commerce; online pricing strategies; online toy market; price dispersion; pricing trends (search for similar items in EconPapers)
JEL-codes: L11 L81 L86 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2007-04
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Working Paper: A Study of Pricing Evolution in the Online Toy Market (2008)
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