Learning from Seller Experiments in Online Markets

49 Pages Posted: 21 Sep 2011 Last revised: 18 Nov 2013

See all articles by Liran Einav

Liran Einav

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Theresa Kuchler

affiliation not provided to SSRN

Jonathan Levin

Stanford University - Department of Economics; Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Neel Sundaresan

eBay Research Labs

Date Written: September 2011

Abstract

The internet has dramatically reduced the cost of varying prices, displays and information provided to consumers, facilitating both active and passive experimentation. We document the prevalence of targeted pricing and auction design variation on eBay, and identify hundreds of thousands of experiments conducted by sellers across a wide array of retail products. We show how this type of data can be used to address questions about consumer behavior and market outcomes, and provide illustrative results on price dispersion, the frequency of over-bidding, the choice of reserve prices, "buy now" options and other auction design parameters, and on consumer sensitivity to shipping fees. We argue that leveraging the experiments of market participants takes advantage of the scale and heterogeneity of online markets and can be a powerful approach for testing and measurement.

Suggested Citation

Einav, Liran and Kuchler, Theresa and Levin, Jonathan D. and Sundaresan, Neel, Learning from Seller Experiments in Online Markets (September 2011). NBER Working Paper No. w17385. Available at SSRN: https://ssrn.com/abstract=1931155

Liran Einav (Contact Author)

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States
650-723-3704 (Phone)
928-223-4973 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Theresa Kuchler

affiliation not provided to SSRN ( email )

Jonathan D. Levin

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Neel Sundaresan

eBay Research Labs ( email )

2065 Hamilton Avenue
San Jose, CA
United States

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