Clicks, Discontinuities, and Firm Demand Online
41 Pages Posted: 26 Oct 2009
Abstract
We exploit a unique dataset from a price comparison site to estimate the determinants of clicks received by online retailers. We find that a firm enjoys a 60% jump in its clicks when it offers the lowest price at the site, and failure to account for discontinuities distorts parameter estimates by nearly 100%. This discontinuity is consistent with a variety of models that have been used to rationalize online price dispersion. Finally, we show that one may use estimates of the determinants of a firm's clicks to obtain bounds on its underlying demand parameters, including standard elasticities of demand.
Suggested Citation: Suggested Citation
Michael Roy Baye
Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )
Bloomington, IN 47405
United States
812-855-2779 (Phone)
812-855-3354 (Fax)
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Position Auctions with Consumer Search
By Susan Athey and Glenn Ellison
-
Paid Placement: Advertising and Search on the Internet
By Yongmin Chen and Chuan He
-
An Empirical Analysis of Search Engine Advertising: Sponsored Search in Electronic Markets
By Anindya Ghose and Sha Yang
-
Paid Placement: Advertising and Search on the Internet
By Yongmin Chen and Chuan He
-
By Sha Yang and Anindya Ghose
-
From Generic to Branded: A Model of Spillover Dynamics in Paid Search Advertising
-
By Juan Feng, Hemant K. Bhargava, ...
-
Search Engine Advertising: Channel Substitution when Pricing Ads to Context
By Avi Goldfarb and Catherine E. Tucker
-
A Dynamic Model of Sponsored Search Advertising
By Song Yao and Carl F. Mela
Clicks, Discontinuities, and Firm Demand Online
This is a Wiley-Blackwell Publishing paper. Wiley-Blackwell Publishing charges $42.00 .
File name: jems.pdf
Size: 458K
If you wish to purchase the right to make copies of this paper for distribution to others, please select the quantity.
