We explore daily patterns of Internet pricing for the two major Internet retailers, Amazon.com and BarnesandNoble.com, using data on 377 books collected over a 449-day period in 2003-2004. We frame this investigation in terms of a key question: How rigid are prices on the Internet? Internet retailers, in contrast with traditional firms, adjust prices any day of the week throughout the year; firms' price adjustments for books occur less frequently than daily-every 90 days on average; price change activity varies by book category, from a high of one change on average every 61 days for best-sellers to a low of one change every 184 days on average for steadysellers; and, Amazon changes prices less frequently than BN. The former changes book prices every 222 days and the latter every 56 days on average.
Index Terms:
Bookselling, e-commerce, economic analysis, Internet retailing, price rigidity, strategic pricing
Citation:
Mark Bergen, Robert J. Kauffman, Dongwon Lee, "How Rigid Are Prices in E-Commerce? An Analysis of Daily Price Change Activity in Internet Retailing," hicss, vol. 8, pp.213c, Proceedings of the 38th Annual Hawaii International Conference on System Sciences (HICSS'05) - Track 8, 2005