Discussion Paper

No. 2008-19 | May 05, 2008
A Study of Pricing Evolution in the Online Toy Market


We examine the pricing trends in the online toy markets by using panel data regression models with error components and serial correlation. Our results indicate that both online branch of multi-channel retailers (OBMCRS) and dotcoms charge similar prices on average, and that over time their prices move in tandem. Although the OBMCR retailers charge significantly different prices, the dotcoms do charge similar prices. Moreover, both retailer types demonstrate different magnitudes of price dispersion that move at different rates over time. Although the price dispersion of OBMCRS is higher than that of the dotcoms at the beginning, the gap narrows over time.

JEL Classification:

L11, L81, L86


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Cite As

Lydia Gan, Zhenlin Yang, and Fang-Fang Tang (2008). A Study of Pricing Evolution in the Online Toy Market. Economics Discussion Papers, No 2008-19, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2008-19

Comments and Questions

Anonymous - Referee Report
June 06, 2008 - 13:23

See attached file

Zhenlin Yang, Lydia Gan, Fang-Fang Tang - Response to Referee Report
September 21, 2010 - 09:04

1) Reviewer 1 has suggested improving the motivations on the empirical research questions. This is now reflected in Section 2 by adding 2nd and 3rd paragraphs on page 2.
2) Reviewer 1 has questioned the correctness and clarity of the econometric model and the way the explanatory variables being constructed. ...[more]

... To address this issue, we have completed rewritten Section 3, and have expanded Sections 4 & 5 to cover all the details with respect to the econometric models and variable constructions.
3) Reviewer 1 has rightfully pointed out that there is large room to improve the writing. We have spent much effort on this and believe that this issue has been satisfactorily addressed.