Temporal Price Dispersion: Evidence from an Online Consumer Electronics Market
John Morgan and
Additional contact information
Patrick Scholten: Bentley College
No 2004-04, Working Papers from Indiana University, Kelley School of Business, Department of Business Economics and Public Policy
Economic theory indicates that E-retailers competing at price comparison sites, such as Shopper.com, must charge prices that cannot be systematically predicted by their rivals. Consistent with theory, we find significant variation in the identity of the lowprice firm as well as the level of the lowest price for 36 of the best-selling consumer electronics products sold at Shopper.com between November 1999 and May 2001. The observed pricing patterns can be explained by firms engaging in short-term price promotions in an attempt to avoid the deleterious outcome associated with price competition. Based on our arguments and the evidence presented, the managerial implications are clear: Strategic unpredictability in prices—through the use of hit and run sales—is a widely used and effective weapon for avoiding all-out price competition in online markets.
Keywords: Temporal price dispersion; price comparison sites; e-retail; sales promotion (search for similar items in EconPapers)
JEL-codes: D4 D8 L13 M3 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (41) Track citations by RSS feed
Published in Journal of Interactive Marketing, 2004
Downloads: (external link)
http://kelley.iu.edu/riharbau/RePEc/iuk/wpaper/bep ... -morgan-scholten.pdf (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:iuk:wpaper:2004-04
Access Statistics for this paper
More papers in Working Papers from Indiana University, Kelley School of Business, Department of Business Economics and Public Policy Contact information at EDIRC.
Bibliographic data for series maintained by Rick Harbaugh ().