Publication Type
Journal Article
Version
acceptedVersion
Publication Date
10-2007
Abstract
Internet technologies should lessen information asymmetry, prompting competitive price reactions, but this does not seem to be happening in Internet-based selling. We study empirical regularities of price change timing for music CD vendors and booksellers to assess several theoretical explanations. Our sample includes 123, 680 daily prices for 169 products and 53 firms. Bertrand competition is insufficient to explain our observation that sellers do not shift prices this way. Tacitly collusive responses to competitors' price changes are observed rather than price changes solely in response to demand or cost shifts as would be expected with Bertrand competition. We find evidence of business rules for strategic pricing associated with tacitly collusive pricing and Edgeworth competition. Copyright © 2007 John Wiley & Sons, Ltd.
Discipline
Computer Sciences | E-Commerce
Research Areas
Information Systems and Management
Publication
Managerial and Decision Economics
Volume
28
Issue
7
First Page
679
Last Page
700
ISSN
0143-6570
Identifier
10.1002/mde.1375
Publisher
Wiley
Citation
Kauffman, R. J. and WOOD, Charles A..
Follow the Leader? Price Change Timing in Internet-Based Selling. (2007). Managerial and Decision Economics. 28, (7), 679-700.
Available at: https://ink.library.smu.edu.sg/sis_research/2731
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1002/mde.1375