Projects

Price comparison sites and competition

Aims

This project, in collaboration with the leading European price comparison service Kelkoo.com, will assess the impact price comparison sites have on the competitiveness, efficiency and industrial structure of retail markets in the two most highly developed Internet retail markets in Europe, the UK and France.
the project will collect; firm specific price, `click-through´ and sales data for the 100 top selling electronic and computer related appliances on a weekly basis.
the data will be used to identify own and cross-price elasticities of demand for over 100 of the best-selling products in European online markets.
The relative importance of non-price information in consumer purchase behaviour, such as transportation costs and times, store name recognition, the number of firms listing prices etc.
The inter - temporal pricing and entry/exit decisions of firms on the Kelkoo site
Firms´ market shares and the industrial concentration of sales in these market and how these change over time
The proportion of customers accessing the site domestically and internationally and differences in the purchase behaviour these two groups of consumers.

Methodology

The research will be conducted in two phases. During the first year of the project will concentrate on analysing the UK market, allowing us to develop data processing software and procedures within a single national site. In the second year the analysis will be extended to include France. Comparisons between the French and UK markets will be especially useful for assessing the impact and significance of the introductions of the Euro in encouraging price competition, and the impact of improved price transparency on consumer on consumer search behaviour internationally.

Keywords

price comparison sites, price dispersion, price competition.

Publications

M.R. Baye, J.R.J. Gatti, P. Kattuman & J. Morgan "Estimating Firm-Level Demand at a Price Comparison Site: Accounting for Shoppers and the Number of Competitors" (pdf)