A Study of Price Adjustments of Online Sellers

Ji Eun Jeon, Choong Kwon Lee


Making decisions on prices must be an important task for sellers to stay competitive in on-line markets. Because the emergence of price-comparison web sites led buyers to be more sensitive to the prices, adjusting prices became very important to on-line sellers. This study collected and analyzed the data of prices on computing peripheral devices posted at a popular web site that enabled buyers to compare the prices on the same products. By analyzing the timings of price adjustments among different sellers using Monte Carlo simulation, we explored the possibility of price coordinations among those sellers. The results indicated that online sellers adjusted their prices on a daily basis rather than a weekly basis and the tacit coordination on the price changes was identified.

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