Measuring Prices and Price Competition Online: Amazon and Barnes and Noble
TLDR
In this paper, the authors used publicly available data on the sales ranks of about 20,000 books to derive quantity proxies at the two leading online booksellers, and matched this information to prices, directly estimating the elasticities of demand facing both merchants as well as creating a price index for online books.Abstract:
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 Barnes and Noble is much more price-elastic than is demand at Amazon. The data also allow us to estimate the magnitude of bias in the CPI due to the rise of Internet sales.read more
Citations
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Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers
TL;DR: In this article, the authors present a framework and empirical estimates that quantify the economic impact of increased product variety made available through electronic markets, and they show that this variety can be a significantly larger source of consumer surplus gains.
ReportDOI
Power Laws in Economics and Finance
TL;DR: In this paper, a review of empirical power laws regarding income and wealth, the size of cities and firms, stock market returns, trading volume, international trade, and executive pay is presented.
Goodbye Pareto Principle, Hello Long Tail: The Effect of Search Costs on the Concentration of Product Sales
TL;DR: Krishnan et al. as mentioned in this paper investigated the long tail phenomenon of the Pareto principle and found that consumers' usage of Internet search and discovery tools, such as recommendation engines, is associated with an increase in the share of niche products.
Journal ArticleDOI
Do Online Reviews Affect Product Sales? The Role of Reviewer Characteristics and Temporal Effects
TL;DR: It is demonstrated that consumers understand the value difference between favorable news and unfavorable news and respond accordingly, and the impact of online reviews on sales diminishes over time, suggesting that firms need not provide incentives for customers to write reviews beyond a certain time period after products have been released.
References
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The Fractal Geometry of Nature
TL;DR: This book is a blend of erudition, popularization, and exposition, and the illustrations include many superb examples of computer graphics that are works of art in their own right.
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Reducing buyer search costs: implications for electronic marketplaces
TL;DR: In this paper, the role of buyer search costs in markets with differentiated product offerings is analyzed in the context of an electronic marketplace, and the allocational efficiencies such a reduction can bring to a differentiated market are formalized.
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Frictionless Commerce? A Comparison of Internet and Conventional Retailers
TL;DR: The authors empirically analyzes the characteristics of the Internet as a channel for two categories of homogeneous products-books and CDs-using a data set of over 8,500 price observations collected over a period of 15 months, comparing pricing behavior at 41 Internet and conventional retail outlets.
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Human Behavior and the Principle of Least Effort: An Introduction to Human Ecology
TL;DR: JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive.
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Frictionless Commerce? A Comparison of Internet and Conventional Retailers
TL;DR: The authors empirically analyzes the characteristics of the Internet as a channel for two categories of homogeneous products (books and CDs) using a data set of over 4,500 price observations collected over a period of 9 months.