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Price Matching in Online Retail

Author

Listed:
  • Bottasso, Anna
  • Robbiano, Simone
  • Marocco, Paolo

Abstract

We analyze a sample of consumer-electronics products sold by the US NewEgg online-retailer to study the impact of Price Matching Guarantees (PMGs) policies on prices. By applying aDifference-in-Differences approach,we find that prices of the policy-adopting retailer increase by 4.7% during the policy validity period and up to five days after the treatment, while those of the major non-adopting competitor are not affected. Results are mainly driven by highlyrated, visible and expensive products, while the policy does not affect low-rated, less visible and cheaper ones. Overall findings are consistent with the hypothesis that PMGs act as price discrimination tools.

Suggested Citation

  • Bottasso, Anna & Robbiano, Simone & Marocco, Paolo, 2023. "Price Matching in Online Retail," GLO Discussion Paper Series 1351, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:1351
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    More about this item

    Keywords

    Price Matching Guarantees; Online Retailing; User Generated Contents; Difference-in-Differences; Price Discrimination; Collusion; Signalling;
    All these keywords.

    JEL classification:

    • 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
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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