NDLI: Price competition and valuation online: (2003).

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Price competition and valuation online: (2003).

Content Provider	CiteSeerX
Author	Goolsbee, Austan Chevalier, Judith
Abstract	Valuing Internet retail firms is made very difficult by the fact that the firms will have to raise margins in the future in order to survive. This raises the question: can these firms raise margins? How competitive are Internet retail markets? Despite the interest in measuring price sensitivity of online consumers, most academic work on Internet commerce is hindered by a lack of data on quantity. In this paper we use publicly available data on the sales ranks of about 20,000 books to derive quantity proxies at the two leading online booksellers. Matching this information to prices, we can directly estimate the elasticities of demand facing both merchants as well as create a price index for online books. The results show significant price sensitivity at both merchants but demand at Barnes and Noble is much more price-elastic than is demand at Amazon. We describe how these findings might impact an assessment of valuation. Acknowledgements: At the moment, this paper greatly overlaps with our paper, “Measuring prices and price competition online: Amazon vs. Barnes and Noble. ” We would like to thank Michael Smith, Peter Rossi, Scott Schaefer, Joel Waldfogel and seminar participants at
File Format	PDF
Publisher Date	2003-01-01
Access Restriction	Open
Subject Keyword	Price Competition Valuation Online Internet Retail Firm Internet Commerce Leading Online Bookseller Seminar Participant Scott Schaefer Academic Work Sale Rank Price Competition Online Online Consumer Quantity Proxy Significant Price Sensitivity Michael Smith Internet Retail Market Price Index Available Data Amazon V Joel Waldfogel Price Sensitivity Peter Rossi Online Book
Content Type	Text
Resource Type	Article

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