Learning from Seller Experiments in Online Markets

Liran Einav, Theresa Kuchler, Jonathan Levin and Neel Sundaresan

No 17385, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The internet has dramatically reduced the cost of varying prices, displays and information provided to consumers, facilitating both active and passive experimentation. We document the prevalence of targeted pricing and auction design variation on eBay, and identify hundreds of thousands of experiments conducted by sellers across a wide array of retail products. We show how this type of data can be used to address questions about consumer behavior and market outcomes, and provide illustrative results on price dispersion, the frequency of over-bidding, the choice of reserve prices, "buy now" options and other auction design parameters, and on consumer sensitivity to shipping fees. We argue that leveraging the experiments of market participants takes advantage of the scale and heterogeneity of online markets and can be a powerful approach for testing and measurement.

JEL-codes: C93 D44 L13 L86 (search for similar items in EconPapers)
Date: 2011-09
New Economics Papers: this item is included in nep-mkt
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Citations: View citations in EconPapers (17)

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Related works:
Working Paper: Learning from Seller Experiements in Online Markets (2011)
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