Selected Press Coverage

Gadgets for Sale...or Not (Slate) Last week, USA Today reported that online sales in November increased 25 percent over those from 2005. If you've shopped for gadgets online this holiday season, you almost certainly found that the camcorder or DVD player you wanted was selling at a wide range of prices. Why is there so much price variation for the same product?...Full Story

Sell Low, Ship High (U.S. News & World Report) Most customers pay attention only to the total price of something they buy. If a baseball bat costs $150 plus $15 shipping and handling–that's a $165 bat. But on the Internet, researchers find in a new study, businesses may have more flexibility to find that pricing sweet spot. Lower sticker prices and higher shipping costs can add up to more sales. Sellers on eBay can boost profits by setting a low opening bid price and charging higher shipping charges, according to a recently published study by economics professors at the UC–Berkeley Haas School of Business and Hong Kong University of Science and Technology...Full Story

The Next Generation Of Price Comparison Sites (Wall Street Journal). The big attraction with shopping-comparison services, of course, is the hunt for a better bargain. Consumers save 18% to 20% on average by using comparison-shopping sites to buy products on the Web, according to research by Michael Baye, a University of Indiana professor; John Morgan, a University of California at Berkeley professor; and Patrick Scholten, a Bentley College professor...Full Story

Price-Comparison Sites Do the Legwork (New York Times; Chicago Tribune). Along with two colleagues - Professor John Morgan of the University of California at Berkeley and Patrick Scholten, an assistant professor of economics at Bentley College in Massachusetts - Professor Michael Baye has published up-to-the-minute statistics on retail pricing strategies...Full Story

E-commerce: Net-Style Nash Equilibrium (Network World). Five years ago, the first price-comparison Web sites were being hailed as heaven on earth for penny pinchers and the fast track to Hell for online merchants who failed to establish and protect a unique reason for being. That early assessment turns out to have been not so hot...Full Story

Online Retailers Play Pricing Games (ZDNet News, CNet News.com). Think you've found the lowest price online? Better double check. That's the advice of economists who research why a plethora of online price comparison systems haven't succeeded in leveling prices on the Internet. "A lot of early studies predicted that all firms would be forced to price their goods at cost and prices would be driven down...Full Story

Getting The Price Right (Forbes). When electronic commerce was new some retailers feared that consumers would know too much. With ever more powerful and smart search technologies cropping up online offering new ways to compare prices, wouldn't price-sensitive consumers automatically gravitate toward retailers with the lowest prices and thus unleash a fierce attack on profit margins? It hasn't quite happened that way...Full Story

The Value of Online Price Information (Marketing Power). In 2000, U.S. Internet retail sales reached a staggering $29 billion, an increase of more than 92% over 1999 sales. Institutions largely unknown to traditional retail markets have emerged on the Internet: price comparison services. These Internet institutions provide centralized locations for retailers to advertise products and for consumers to comparison shop for physically identical products. The popularity of Internet price comparison services has...Full Story

Online Sales Offer Fresh Look at Economy (New York Times). According to Census Bureau estimates, online purchases in the United States totaled more than $11 billion in the third quarter this year, up 34 percent over the period in 2001. Despite this impressive growth, online sales are still tiny compared with total retail sales, which were $827 billion in the third quarter. Though online sales are not yet important economically, they are important to economists because they offer a rich source of economic data. It is much easier to collect online prices than offline prices, and with a little bit of ingenuity, you can even harvest data about costs and sales volume, information that is awfully hard to come by in the real world. Economists Michael R. Baye, Patrick Scholten, and John Morgan...Full Story