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| Author: | Mizuno, T. Nirei, M. Watanabe, T. |
| Title: | Closely competing firms and price adjustment: some findings from an online marketplace |
| Journal: | Scandinavian Journal of Economics
2010 : VOL. 112:4 p. 673-696 |
| Index terms: | pricing strategy retailing Japan behavioural science |
| Language: | eng |
| Abstract: | Retailers' price-setting behavior is examined using a unique dataset containing by-the-second records of prices offered by closely competing retailers on a major Japanese price-comparison website. First, it is found that, when the average price of a product across retailers falls rapidly, the frequency of price adjustments increases, and the size of price adjustments becomes larger. Second, positive autocorrelation is found in the frequency of price adjustments, implying that there tends to be clustering where price adjustments occur in succession. In contrast, there is no such autocorrelation in the size of price adjustments. These two findings suggest that the behavior of competing retailers is characterized by state-dependent pricing rather than time-dependent pricing. |
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