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http://ssrn.com/abstract=1991860
 
 

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Market Structure and Market Performance in E-Commerce


Franz Hackl


Johannes Kepler University Linz - Department of Economics

Michael Kummer


Centre for European Economic Research (ZEW), Mannheim; CDSE, Mannheim

Rudolf Winter-Ebmer


Johannes Kepler University Linz - Department of Economics; Institute for Advanced Studies (IHS) - Department of Economics & Finance; Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

Christine Zulehner


Johannes Kepler University Linz; Austrian Institute of Economic Research (WIFO)

December 22, 2011

ZEW - Centre for European Economic Research Discussion Paper No. 11-084

Abstract:     
We investigate the effect of market structure on market performance in the market for consumer electronics. We exploit product life cycle information to build an instrumental variable for the number of firms in a market, a variable which hitherto had to be treated as exogenous in comparable studies on seller-behavior in e-commerce. We combine data from Austria's largest online site for price comparisons with retail data on wholesale prices provided by a major hardware producer for consumer electronics. We observe input prices of firms, and all their moves in the entry and the pricing game. Using this information for 70 digital cameras, we generate instrumental variables based on the shops' entry decisions in the past. We find that instrumenting is particularly important for estimating the effect of competition on the markup of the price leader.

Number of Pages in PDF File: 36

Keywords: Retailing, Product Life Cycle, Market Structure, Market Performance, Markup, Price Dispersion

JEL Classification: L11, L13, L81, D43

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Date posted: February 2, 2012  

Suggested Citation

Hackl, Franz and Kummer, Michael and Winter-Ebmer, Rudolf and Zulehner, Christine, Market Structure and Market Performance in E-Commerce (December 22, 2011). ZEW - Centre for European Economic Research Discussion Paper No. 11-084. Available at SSRN: http://ssrn.com/abstract=1991860 or http://dx.doi.org/10.2139/ssrn.1991860

Contact Information

Franz Hackl
University of Linz - Department of Economics ( email )
Altenbergerstrasse 69
A-4040 Linz, 4040
Austria
HOME PAGE: http://www.economics.uni-linz.ac.at/hackl
Michael Kummer (Contact Author)
Centre for European Economic Research (ZEW), Mannheim ( email )
P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany
HOME PAGE: http://www.zew.de/en/mitarbeiter/mitarbeiter.php3?action=mita&kurz=mkm
CDSE, Mannheim ( email )
Mannheim, D-68131
Germany
Rudolf Winter-Ebmer
University of Linz - Department of Economics ( email )
Altenbergerstrasse 69
A-4040 Linz, 4040
Austria
+43 732 2468 8236 (Phone)
+43 732 2468 8238 (Fax)
HOME PAGE: http://www.econ.jku.at/winter
Institute for Advanced Studies (IHS) - Department of Economics & Finance ( email )
Stumpergasse 56
A-1060 Vienna, A-1060
Austria
HOME PAGE: http://www.ihs.ac.at
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Christine Zulehner
University of Linz ( email )
Altenbergerstrasse 69
Linz, A4040
Austria
HOME PAGE: http://www.econ.jku.at/Christine.Zulehner/
Austrian Institute of Economic Research (WIFO) ( email )
P.O. Box 91
Wien, A-1103
Austria
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