Price Setting in Online Markets: Does it Click?

60 Pages Posted: 19 Oct 2015

See all articles by Yuriy Gorodnichenko

Yuriy Gorodnichenko

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Viacheslav Sheremirov

Federal Reserve Banks - Federal Reserve Bank of Boston

Oleksandr Talavera

Swansea University - School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: 2015-01-01

Abstract

Using a unique dataset of daily U.S. and U.K. price listings and the associated number of clicks for precisely defined goods from a major shopping platform, this paper explores how prices are set in online markets, which have a number of special properties such as low search costs, low costs of monitoring competitors' prices, and low costs of nominal price adjustment. High-quality data are not only useful to estimate price rigidity and other properties of price adjustment in online commerce but also allow comparing the behavior of those properties with estimates available from brick-and-mortar stores.

Keywords: online markets, prices, price dispersion

JEL Classification: E3

Suggested Citation

Gorodnichenko, Yuriy and Sheremirov, Viacheslav and Talavera, Oleksandr, Price Setting in Online Markets: Does it Click? (2015-01-01). FRB of Boston Working Paper No. 15-1, Available at SSRN: https://ssrn.com/abstract=2675692

Yuriy Gorodnichenko (Contact Author)

University of California, Berkeley - Department of Economics ( email )

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HOME PAGE: http://www.econ.berkeley.edu/~ygorodni/index.htm

National Bureau of Economic Research (NBER)

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Viacheslav Sheremirov

Federal Reserve Banks - Federal Reserve Bank of Boston ( email )

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Oleksandr Talavera

Swansea University - School of Management ( email )

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