Business, Management and Accounting
4 years ago

Online retailers' pricing strategy crucial for attracting customers and boosting sales.

2 views
Économie publique/Public economics
Estimating Firm-Level Demand at a Price Comparison Site: Accounting for Shoppers and the Number of Competitors
Michael R. Baye, Rupert J Gatti, Paul Kattuman, John W. Morgan

Paper Summary

The article looks at how online price comparison sites affect the demand for products. By studying data from Kelkoo.com, the researchers found that the number of competitors and a firm's position on the site impact how many people buy from them. They discovered that having many competitors leads to a bigger drop in demand when prices change. Also, when a firm offers the lowest price, more people buy from them. The study showed that around 13% of shoppers on Kelkoo buy from the seller with the lowest price.

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