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

Research Team

  • Michael Kummer, ZEW – Leibniz Centre for European Economic Research Mannheim, Research Group Information and Communication Technologies
  • Associate Prof. Dr. Franz Hackl, University of Linz, Department of Economics
  • Prof. Dr. Rudolf Winter-Ebmer, University of Linz, Department of Economics
  • Prof. DI Dr. Christine Zulehner, University of Linz, Department of Economics

Project Description

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 characterise firm heterogeneity and relate it to firms' entry and exit strategies in both the introduction-stage and the shake-out phase. We analyse which of those strategies are most profitable and ask which factors in firm heterogeneity drive exit during the shake-out stage.

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.

Duration: October 2010 - March 2012

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