Model And Empirical Analysis Of Online Retailer Price Competition

In recent years, with the development of Internet technology retail industry has beenin a rapidly developing, at the same time derived the On-line retail market. In the marketthere are three retailer styles: traditional retailer, Multichannel market, E-retailer. The pricecompetition exists between the traditional retailers and on-line retailers, and also betweenmultichannel retailers and E-retailers. The competition shows several new and complexfeatures.Focus on this phenomenon, this paper investigates on price competition betweenmulti-channel retailers and E-retailers and analyzes the price competition throughtheoretical and empirical studies. First, it constructs a market competition model oftraditional retailers and on-line retailers, gives the distribution between two kinds ofretailers. Then in different market size it constructs model of multichannel retailers andE-retailers, gives the optimal prices of the retailers. An important conclusion of the modelis that there are four parameters influence the price level relationship of two types ofretailers.In the empirical research, we choose mobile phone respectively to do statistic analysison thirty hundred price data. It shows that: the price compare between the two kinds ofretailers is consistent with the most of previous academic achievements, the E-retailers’prices are lower than multichannel retailers’ and the multi retailers have the lower pricedispersion.Finally, on the basis of holding the Chinese on-line retail market and the theoreticaland empirical studies, there are some suggestions for on-line retails and on-line retailmarket aim to promote the development of Chinese retailer market.