EconPapers    
Economics at your fingertips  
 

Quality and price setting of high-tech goods

Yuriy Gorodnichenko, Oleksandr Talavera and Nam Vu

Economic Modelling, 2021, vol. 98, issue C, 69-85

Abstract: This paper investigates the link between product quality and price setting for central processing units (CPUs). Using thousands of price quotes from a popular price-comparison website, we find that market fundamentals, such as the number of sellers, median price, share of convenient prices and level of seller stability, are important factors for explaining price stickiness and price dispersion. We demonstrate that calculations of price inflation require conditioning not only on CPU quality, but also on market fundamentals to ensure that CPU attributes are priced correctly. Failing to do so can result in an understatement of CPU price deflation in the sample period.

Keywords: Price setting; e-commerce; Product quality; Hedonic pricing; Inflation (search for similar items in EconPapers)
JEL-codes: E31 L11 L81 L86 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999321000444
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Quality and Price Setting of High-Tech Goods (2021) Downloads
Working Paper: Quality and Price Setting of High-Tech Goods (2021) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:98:y:2021:i:c:p:69-85

DOI: 10.1016/j.econmod.2021.02.010

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2021-10-23
Handle: RePEc:eee:ecmode:v:98:y:2021:i:c:p:69-85