Price matching and platform pricing

Bottasso, Anna and Marocco, Paolo and Robbiano, Simone (2021): Price matching and platform pricing.

Abstract

We investigate the effects of Price Matching Guarantees (PMGs) commercial policies adopted by the US NewEgg online platform on prices of a representative sample of consumer electronics products. By applying a Difference-in-Differences (DiD) identification strategy, we find price reductions of about 3% occurring after the policy implementation. Moreover, we control for products characteristics recovered from User Generated Contents (UGCs) and perform heterogeneity analysis based on products appreciation and visibility. Estimates suggest that for high appreciated (and visible) products prices are higher during the policy validity period, while some specifications provide evidence in favour of price reductions occurring after the policy implementation for low appreciated and low visible goods. Results are consistent with the hypothesis that NewEgg’s PMGs policies can act as tools for price discrimination.

• Item Type: MPRA Paper
• Language: English
• Keywords: Price Matching Guarantees; Online Sales Platforms; User Generated Contents; Difference-in-Differences
• Subjects: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure ; Size Distribution of Firms; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L15 - Information and Product Quality ; Standardization and Compatibility; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L20 - General; L - Industrial Organization > L8 - Industry Studies: Services > L81 - Retail and Wholesale Trade ; e-Commerce

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