Do Drivers of Online Price Dispersion Change as Online Markets Grow?

نویسندگان

  • Venkatesh Shankar
  • Xing Pan
  • Brian T. Ratchford
چکیده

Several studies have shown that frictionless e-commerce is only fictional and that online price dispersion is persistent and high (e.g., Clay, Krishnan, Wolf and Fernandes 1999; Brynjolfsson and Smith 2000; Pan, Ratchford and Shankar 2002a, 2002b). Pan, Ratchford and Shankar (2002b) show that that such a phenomenon is mainly due to e-tailer characteristics such as shopping convenience, reliability and consumer awareness, and market characteristics such as number of competitors and consumer involvement. Baye, Morgan and Sholton (2001) show that there is very little evidence to show that prices on the Internet are converging over time to the law of one price. Ratchford, Pan and Shankar (2003) show that online price dispersion decreased significantly from November 2000 to November 2001, but is still persistent. We extend this stream of research by empirically examining whether the drivers of online price dispersion change as online markets mature over time. Our analysis is based on data collected during November 2000 and 2001 on several price dispersion measures covering price quotes for a total of 13,501 products from 194 e-tailers in a variety of product categories including books, CDs, DVDs, desktop computers, laptop computers, PDAs, computer software, and consumer electronics. Specifically, we examine through regression analysis, whether the key drivers of online price dispersion remained the same and whether their importance in explaining dispersion changed between 2000 and 2001. The results show that the key e-tailer characteristics did not change, while the positioning of some e-tailers, including Amazon.com and Barnes&Noble, changed over time. The drivers of online price dispersion, in particular, e-tailer service attributes, largely remained stable over time. However, as online market grew, variation in timing of online market entry no longer had a significant effect and the number of competitors had a weaker effect on online dispersion. E-tailer, market and product characteristics explain a greater percentage of online price dispersion over time.

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تاریخ انتشار 2002