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Market Structure and Market Performance in E-Commerce

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  • Hackl, Franz
  • Kummer, Michael E
  • Winter-Ebmer, Rudolf
  • Zulehner, Christine

Abstract

We investigate the causal effect of market structure on market performance in the consumer electronics. 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 over the whole product lifecycle. Using this information for 70 digital cameras, we generate instrumental variables for the number of firms in the market based on the shops' entry decisions on other product markets in the past. We find that instrumenting is particularly important for estimating the effect of competition on the markup of the price leader.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9001.

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Date of creation: Jun 2012
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Handle: RePEc:cpr:ceprdp:9001

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Keywords: Market Performance; Market Structure; Markup; Price Dispersion; Product Lifecycle; Retailing;

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  1. Michael R. Baye & J. Rupert J. Gatti & Paul Kattuman & John Morgan, 2006. "Clicks, Discontinuities, and Firm Demand Online," Working Papers 2006-21, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
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  21. repec:rje:randje:v:37:y:2006:i:4:p:964-982 is not listed on IDEAS
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