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Pricing behavior in the online DVD market
Institution:1. Department of Economics, National University of Singapore, Singapore 119260, Singapore;2. Department of Marketing, Chinese University of Hong Kong, Shatin, Hong Kong, China;1. Department of Marketing and International Business, Lingnan University, Hong Kong;2. Department of Marketing, International Business & Strategy, Goodman School of Business Brock University, St. Catharines, Ontario, L2S 3A1, Canada;3. Zhejiang University School of Management, 388 Yuhangtang Road, Hangzhou, Zhejiang Province, 310058, PR China;1. Athens University of Economics and Business, Department of Business Administration, 76, Patission Avenue, PC: 10474, Athens, Greece;2. Athens University of Economics and Business, Department of Management Science and Technology, Management, Strategy and Entrepreneurship Laboratory, 12, Kodrigtonos Street, PC: 11257, Athens, Greece;3. University of Piraeus, Department of Economics, 80, M. Karaoli and A. Dimitriou Street, PC: 18534 Piraeus, Greece;1. School of Economics and Management, Tilburg University, Tilburg, the Netherlands;2. School of Business and Economics, RWTH Aachen University, Aachen, Germany;3. School of Mathematics and Logistics, Jacobs University, Bremen, Germany;1. Lifespan Learning and Sleep Laboratory, UCL-Institute of Education, London, UK;2. School of Psychotherapy & Psychology, Regent’s University London, London, UK
Abstract:Using a data set with of 5508 observations collected in the online DVD market, we compare the pricing behavior between online branches of multi-channel retailers (MCRs) and online-only retailers. We find that (1) prices by online-only retailers are lower than prices by online MCRs by an average of $1.51 or 6.8 percent; (2) the price dispersion for the popular titles is sharply lower among online-only retailers than that among MCRs online; and (3) online-only retailers change prices more often than online MCRs although price changes by both types are few. The evidence suggests that the pricing efficiency diminishes as the multi-channel retailing format dominates the online retailing market.
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