Market structure and market performance in e-commerce
AbstractWe investigate the effect of market structure on market performance in the market for consumer electronics. This research is novel, because we exploit product life cycle information to build an instrumental variable for the number of firms in a market, a variable which hitherto had to be treated as exogenous in comparable studies on seller-behavior in e-commerce. We combine data from Austria's largest online site for price comparisons with retail-data on whole sale 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. Using this information for 80 digital cameras, we generate instrumental variables based on the shops' entry decisions 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 InfoPaper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 11-084.
Date of creation: 2011
Date of revision:
retailing; product life cycle; market structure; market performance; markup; price dispersion;
Other versions of this item:
- Hackl, Franz & Kummer, Michael E. & Winter-Ebmer, Rudolf & Zulehner, Christine, 2012. "Market structure and market performance in e-commerce," ZEW Discussion Papers 11-084 [rev.], ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Franz Hackl & Michael E. Kummer & Rudolf Winter-Ebmer & Christine Zulehner, 2012. "Market Structure and Market Performance in E-Commerce," Economics working papers 2012-07, Department of Economics, Johannes Kepler University Linz, Austria.
- Hackl, Franz & Kummer, Michael E. & Winter-Ebmer, Rudolf & Zulehner, Christine, 2012. "Market Structure and Market Performance in E-Commerce," Economics Series 287, Institute for Advanced Studies.
- Hackl, Franz & Kummer, Michael E & Winter-Ebmer, Rudolf & Zulehner, Christine, 2012. "Market Structure and Market Performance in E-Commerce," CEPR Discussion Papers 9001, C.E.P.R. Discussion Papers.
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-02-20 (All new papers)
- NEP-BEC-2012-02-20 (Business Economics)
- NEP-COM-2012-02-20 (Industrial Competition)
- NEP-HME-2012-02-20 (Heterodox Microeconomics)
- NEP-IND-2012-02-20 (Industrial Organization)
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