Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/54959
Authors: 
Hackl, Franz
Kummer, Michael E.
Winter-Ebmer, Rudolf
Zulehner, Christine
Year of Publication: 
2011
Series/Report no.: 
ZEW Discussion Papers 11-084
Abstract: 
We investigate the effect of market structure on market performance in the market for consumer electronics. This research is novel, because we exploit product life cycle information to build an instrumental variable for the number of firms in a market, a variable which hitherto had to be treated as exogenous in comparable studies on seller-behavior in e-commerce. We combine data from Austria's largest online site for price comparisons with retail-data on whole sale prices provided by a major hardware producer for consumer electronics. We observe input prices of firms, and all their moves in the entry and the pricing game. Using this information for 80 digital cameras, we generate instrumental variables based on the shops' entry decisions in the past. We find that instrumenting is particularly important for estimating the effect of competition on the markup of the price-leader.
Subjects: 
retailing
product life cycle
market structure
market performance
markup
price dispersion
JEL: 
L11
L13
L81
D43
Document Type: 
Working Paper

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