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Market Structure and Market Performance in E-Commerce

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

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.

Suggested Citation

  • Winter-Ebmer, Rudolf & Zulehner, Christine & Hackl, Franz & Kummer, Michael E, 2012. "Market Structure and Market Performance in E-Commerce," CEPR Discussion Papers 9001, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:9001
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    Cited by:

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    2. Rizov, Marian & Vecchi, Michela & Domenech, Josep, 2022. "Going online: Forecasting the impact of websites on productivity and market structure," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    3. Harkonen, Janne & Haapasalo, Harri & Hanninen, Kai, 2015. "Productisation: A review and research agenda," International Journal of Production Economics, Elsevier, vol. 164(C), pages 65-82.
    4. Franz Hackl & Michael Hölzl‐Leitner & Rudolf Winter‐Ebmer & Christine Zulehner, 2021. "Successful retailer strategies in price comparison platforms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(5), pages 1284-1305, July.
    5. Pantano, Eleonora & Vannucci, Virginia, 2019. "Who is innovating? An exploratory research of digital technologies diffusion in retail industry," Journal of Retailing and Consumer Services, Elsevier, vol. 49(C), pages 297-304.
    6. Ehsan Mousavi Khaneghah & Nosratollah Shadnoush & Amin Salem, 2017. "Artemis time: A mathematical model to calculate maximum acceptable waiting time in B2C e-commerce," Cogent Business & Management, Taylor & Francis Journals, vol. 4(1), pages 1405509-140, January.
    7. Gonzalo Wandosell & María Concepción Parra-Meroño & Raul Baños, 2019. "Online Store Locator: An Essential Resource for Retailers in the 21st Century," Social Sciences, MDPI, vol. 8(2), pages 1-13, February.
    8. Duch-Brown, Néstor & Grzybowski, Lukasz & Romahn, André & Verboven, Frank, 2017. "The impact of online sales on consumers and firms. Evidence from consumer electronics," International Journal of Industrial Organization, Elsevier, vol. 52(C), pages 30-62.
    9. Pérez-Amaral, Teodosio & Valarezo, Angel & López, Rafael & Garín-Muñoz, Teresa & Herguera, Iñigo, 2020. "E-commerce by individuals in Spain using panel data 2008–2016," Telecommunications Policy, Elsevier, vol. 44(4).
    10. Franz Hackl & Michael Hölzl-Leitner & Rudolf Winter-Ebmer & Christine Zulehner, 2018. "Success of firm strategies in e-commerce," Economics working papers 2018-10, Department of Economics, Johannes Kepler University Linz, Austria.
    11. Pérez-Amaral, Teodosio & Valarezo, Angel & López, Rafael & Garín-Muñoz, Teresa & Herguera, Iñigo, 2019. "E-commerce and digital divide in Spain using individual panel data 2008-2016," 30th European Regional ITS Conference, Helsinki 2019 205206, International Telecommunications Society (ITS).

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    More about this item

    Keywords

    Market performance; Market structure; Markup; Price dispersion; Product lifecycle; Retailing;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • 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

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