Convenience pricing in online retailing: Evidence from Amazon.com

Régis Chenavaz, Joeffrey Drouard (), Octavio Escobar and Bruno Karoubi

Economic Modelling, 2018, vol. 70, issue C, 127-139

Abstract: To expedite payments, firms use convenience pricing strategies. A price is considered convenient if it can be paid with few coins. Convenient prices are well understood in offline retailing, but not online. This article fills the gap, examining an original panel dataset more than 2.5 million observations of book prices from Amazon.com. We provide empirical evidence supporting two claims. First in a static setup, more convenient prices are more likely to be set. Second in a dynamic setup, more convenient prices are more rigid. Emphasizing the role of convenience, this work sheds new light on price setting in online retailing.

Keywords: Convenient prices; Price rigidity; Rational inattention; Amazon.com; Online retailing (search for similar items in EconPapers)
JEL-codes: D11 D22 D40 L11 L81 M21 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Convenience pricing in online retailing: Evidence from Amazon.com (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:70:y:2018:i:c:p:127-139

DOI: 10.1016/j.econmod.2017.10.016

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