<scp>Clicks, Discontinuities, and Firm Demand Online</scp>
Journal of Economics & Management StrategyPublished 21 October 2009
Michael R. Baye, Rupert Gatti, Paul Kattuman, John W. Morgan
Citations88
SJR quartileQ1
SJR score1.08
SNIP1.01
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Abstract
We exploit a unique dataset from a price comparison site to estimate the determinants of clicks received by online retailers. We find that a firm enjoys a 60% jump in its clicks when it offers the lowest price at the site, and failure to account for discontinuities distorts parameter estimates by nearly 100%. This discontinuity is consistent with a variety of models that have been used to rationalize online price dispersion. Finally, we show that one may use estimates of the determinants of a firm's clicks to obtain bounds on its underlying demand parameters, including standard elasticities of demand.
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