Measuring Prices and Price Competition Online: Amazon.com and BarnesandNoble.com

Despite the interest in measuring price sensitivity of online consumers, most academic work on Internet commerce is hindered by a lack of data on quantity. In this paper we use publicly available data on the sales ranks of about 20,000 books to derive quantity proxies at the two leading online books...

Full description

Saved in:
Bibliographic Details
Published in:Quantitative marketing and economics 2003-06, Vol.1 (2), p.203
Main Authors: Chevalier, Judith, Goolsbee, Austan
Format: Article
Language:English
Subjects:
Bias
Bookstores
Competition
Consumer Price Index
Consumers
Data mining
Elasticity of demand
Internet
Price elasticity
Retail stores
Citations: Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Despite the interest in measuring price sensitivity of online consumers, most academic work on Internet commerce is hindered by a lack of data on quantity. In this paper we use publicly available data on the sales ranks of about 20,000 books to derive quantity proxies at the two leading online booksellers. Matching this information to prices, we can directly estimate the elasticities of demand facing both merchants as well as create a price index for online books. The results show significant price sensitivity at both merchants but demand at BarnesandNoble.com is much more price-elastic than is demand at Amazon.com. The data also allow us to estimate the magnitude of bias in the CPI due to the rise of Internet sales.
ISSN:1570-7156
1573-711X
DOI:10.1023/A:1024634613982