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Determinants of prices in an online marketplace

Determinants of prices in an online marketplace Purpose – Despite the availability of side‐by‐side price comparisons, online retailers often charge very different prices for the same product. The purpose of this paper is to identify the drivers of price differences in an online retail marketplace by examining pricing information from a sample of sellers in the market. Design/methodology/approach – An empirical, quantitative research study of Amazon Marketplace, using 498 observations of online sellers of a variety of electronics products was conducted. A regression analysis is employed to determine the drivers of these sellers' prices. Findings – The results provide a set of factors associated with deviation from the mean price Amazon Marketplace retailers charge for a given product. The authors find that online retailers that charge higher prices post additional channels of customer service, post their return policy, have lower reputation scores, display a retail brand logo, offer more products, and are not electronic specialists. Originality/value – The paper contributes to the theoretical understanding of the effects of information quality and governance structures on prices. This is the first study to focus on these issues in an online marketplace setting. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Product & Brand Management Emerald Publishing

Determinants of prices in an online marketplace

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1061-0421
DOI
10.1108/10610421111157946
Publisher site
See Article on Publisher Site

Abstract

Purpose – Despite the availability of side‐by‐side price comparisons, online retailers often charge very different prices for the same product. The purpose of this paper is to identify the drivers of price differences in an online retail marketplace by examining pricing information from a sample of sellers in the market. Design/methodology/approach – An empirical, quantitative research study of Amazon Marketplace, using 498 observations of online sellers of a variety of electronics products was conducted. A regression analysis is employed to determine the drivers of these sellers' prices. Findings – The results provide a set of factors associated with deviation from the mean price Amazon Marketplace retailers charge for a given product. The authors find that online retailers that charge higher prices post additional channels of customer service, post their return policy, have lower reputation scores, display a retail brand logo, offer more products, and are not electronic specialists. Originality/value – The paper contributes to the theoretical understanding of the effects of information quality and governance structures on prices. This is the first study to focus on these issues in an online marketplace setting.

Journal

Journal of Product & Brand ManagementEmerald Publishing

Published: Aug 23, 2011

Keywords: Pricing; Premium pricing; Brands; Logos; Information governance; Customer service management; Reputation (online seller reputation)

References