Assessing Sale Strategies in Online Markets Using Matched Listings

• Published in: American economic journal. Microeconomics Vol. 7; no. 2; pp. 215 - 247
• Main Authors: Einav, Liran, Kuchler, Theresa, Levin, Jonathan, Sundaresan, Neel
• Format: Journal Article
• Language: English
• Published: Pittsburgh American Economic Association 01-05-2015
• Subjects: Auctions; Conditional sales; Consumer behavior; Consumers; Demand curves; Economic models; Economic statistics; Economic theory; Electronic commerce; Estimates; Experiments; Fees; Fees & charges; Fractions; Hypotheses; Internet; Market prices; Market strategy; Microeconomics; Online sales; Prices; Pricing strategies; Sales; Sales presentations; Sales strategies; Sales transactions; Shipping; Studies; United States > US
• ISSN: 1945-7669; 1945-7685
• DOI: 10.1257/mic.20130046

We use data from eBay to identify hundreds of thousands of instances in which retailers posted otherwise identical product listings with targeted variation in pricing and auction design. We use these matched listings to measure the dispersion in auction prices for identical goods sold by the same seller, to estimate nonparametric auction demand curves, to analyze the effect of buy it now options, and to assess consumer sensitivity to shipping fees. The scale of the data allows us to show that the estimates are robust to narrower criteria for matching listings, thereby addressing plausible concerns about endogeneity and selection biases.