Learning from Seller Experiments in Online Markets
AbstractThe 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.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17385.
Date of creation: Sep 2011
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Other versions of this item:
- Liran Einav & Theresa Kuchler & Jonathan Levin & Neel Sundaresan, 2011. "Learning from Seller Experiements in Online Markets," Discussion Papers 10-033, Stanford Institute for Economic Policy Research.
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
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- Patrick Bajari & Ali Horta�su, 2004. "Economic Insights from Internet Auctions," Journal of Economic Literature, American Economic Association, vol. 42(2), pages 457-486, June.
- Jennifer Brown & Tanjim Hossain & John Morgan, 2010. "Shrouded Attributes and Information Suppression: Evidence from the Field," The Quarterly Journal of Economics, MIT Press, vol. 125(2), pages 859-876, May.
- Liran Einav & Dan Knoepfle & Jonathan D. Levin & Neel Sundaresan, 2012.
"Sales Taxes and Internet Commerce,"
NBER Working Papers
18018, National Bureau of Economic Research, Inc.
- Jonathan D. Levin, 2011.
"The Economics of Internet Markets,"
NBER Working Papers
16852, National Bureau of Economic Research, Inc.
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