Convenience pricing in online retailing: Evidence from Amazon.com

Régis Chenavaz, Joeffrey Drouard (), Octavio R. Escobar and Bruno Karoubi
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Octavio R. Escobar: PSB - Paris School of Business - HESAM - HESAM Université - Communauté d'universités et d'établissements Hautes écoles Sorbonne Arts et métiers université
Bruno Karoubi: UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12

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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)
Date: 2018-04
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Citations: View citations in EconPapers (3)

Published in Economic Modelling, 2018, 70, pp.127-139. ⟨10.1016/j.econmod.2017.10.016⟩

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Journal Article: Convenience pricing in online retailing: Evidence from Amazon.com (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01683838

DOI: 10.1016/j.econmod.2017.10.016

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