SEEK-Project 2010: Firm Behaviour over the Product Life Cycle. Entry, Exit and Pricing Strategies on Online Price-Comparison Sites

SEEK-Project 2010: Firm Behaviour over the Product Life Cycle. Entry, Exit and Pricing Strategies on Online Price-Comparison Sites

The aim of this project is to investigate the competitive behaviour of firms over the product-life-cycle of consumer electronics. We plan to combine data from Austria’s largest online site for price comparisons with retail-data provided by a price comparison site for consumer electronics.

This data-base will enable us to observe input prices of firms, and all their moves in the entry and the pricing game on hundreds of product markets.
We characterize firm heterogeneity and relate it to firms’ entry and exit strategies in both the introduction-stage and the shake-out phase. We analyze which of those strategies are most profitable and ask which factors in firm heterogeneity drive exit during the shake-out stage.

This research is novel in the following aspects: First, other than in similar studies, we dispose of detailed data on individual firms’ entry/exit-behavior and pricing strategies on the level of product varieties. We also observe individual consumer behavior. Second, as we observe input prices (whole sale prices) for the products of a major hardware producer we are able to analyze price cost margins which a much better understanding of firms’ strategies. Given this data structure we are confident that our results will provide new insights on firms’ behaviour over the product life cycle on a much more detailed observational level.

The research programme "Strengthening Efficiency and Competitiveness in the European Knowledge Economies (SEEK)" is funded by the State of Baden-Württemberg.

Additional information regarding the SEEK research programme.

Project members

Michael Kummer

Michael Kummer

Coordinator
Research Associate

To the profile

Selected Publications

Hackl, Franz, Michael Kummer, Rudolf Winter-Ebmer and Christine Zulehner (2014), Market Structure and Market Performance in E-Commerce, European Economic Review 68 , 199 - 218

Selected Events

Workshop

SEEK Workshop on Entry, Pricing, and Consumer Search in Online Markets

Within the framework of the research programme "Strengthening Efficiency and Competitiveness in the European Knowledge Economies" (SEEK), the Centre for European Economic Research (ZEW), Mannheim (Germany),…

Contact

Research Associate, Prof. Michael Kummer, PhD