Price Dispersion and Loss-Leader Pricing: Evidence from the Online Book Industry
构建理论模型分析零售商交叉销售能力不对称时的定价策略，发现高交叉销售能力的零售商更倾向对高需求产品采用亏本定价，导致价格离散随需求增加而扩大，并用在线图书行业数据验证。
In this paper, we develop a theoretical model to analyze the pricing strategies of competing retailers with asymmetric cross-selling capabilities when product demand changes. Our results suggest that retailers with better opportunities for cross-selling have higher incentives to adopt loss-leader pricing on high-demand products than retailers with low cross-selling capabilities. As a result, price dispersion of a product across retailers rises when its demand increases. The predictions of our model are consistent with the empirical evidence from the online book retailing industry. Using product breadth as a proxy for cross-selling capability, we find that retailers with high cross-selling capabilities reduce prices on best sellers more aggressively than retailers with low cross-selling capabilities. As a result, price dispersion increases when a book makes it to the best-seller list, and the increase is mainly driven by the difference in pricing behavior between retailers with different cross-selling capabilities. Our empirical results are robust against a number of alternative explanations. This paper was accepted by Sandra Slaughter, information systems.