Paid-Content.org - Scientific Publications and Articles

"Prices and Price Dispersion on the Web: Evidence from the Online Book Industry"

Publication Title: Prices and Price Dispersion on the Web: Evidence from the Online Book Industry
Author(s): Karen Clay and Ramayya Krishnan and Eric Wolff

Year: 2001
Published in: The Journal of Industrial Economics

Topic of the Publication: - Economics
- Pricing
- Information Goods
- Paid Services

Abstract:
Using data collected between August, 1999, and January, 2000, covering 399 books, we examine pricing by thirty-two online United States-based bookstores. At the aggregate level, we find that both advertising and competitive structure had the predicted effects. More competition led to lower prices and to lower price dispersion. Holding competitive structure constant, more widely advertised items also had lower prices. At the firm level, we observe considerable heterogeneity in behavior. Firms had differentiated (or attempted to differentiate) on dimensions such as brand, price, and selection.
back