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An HLM-model of online price premia

Author

Listed:
  • Evgeny A. Antipov

    (National Research University Higher School of Economics)

Abstract

Some Internet stores manage to charge prices that are significantly higher than market averages, therefore, obtaining some sort of price premium. This paper is dedicated to building a model that can be used to explain and predict a typical price premium that an Internet store charges for a specific product based on the information about the characteristics of the store and the features of the market for this product. Such models can provide support for pricing and assortment decisions: in particular, they allow detecting products that a store is likely to sell with the highest or the lowest markup based on price premia that are charged by stores with similar characteristics on similar markets.

Suggested Citation

  • Evgeny A. Antipov, 2014. "An HLM-model of online price premia," Economics Bulletin, AccessEcon, vol. 34(2), pages 892-900.
    • Handle: RePEc:ebl:ecbull:eb-14-00104
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2014/Volume34/EB-14-V34-I2-P84.pdf
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    References listed on IDEAS

    as
    1. Varian, Hal R, 1980. "A Model of Sales," American Economic Review, American Economic Association, vol. 70(4), pages 651-659, September.
    2. Eric K. Clemons & Il-Horn Hann & Lorin M. Hitt, 2002. "Price Dispersion and Differentiation in Online Travel: An Empirical Investigation," Management Science, INFORMS, vol. 48(4), pages 534-549, April.
    3. Glenn Ellison & Sara Fisher Ellison, 2009. "Search, Obfuscation, and Price Elasticities on the Internet," Econometrica, Econometric Society, vol. 77(2), pages 427-452, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    hierarchical linear modeling; e-Commerce; price dispersion;
    All these keywords.

    JEL classification:

    • M0 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General
    • M3 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising

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