Seller Reputation and Price Gouging

[araomd]

So there is real data that noobs price gouge and high reputation sellers don't.


Seller Reputation and Price Gouging:
Evidence from the COVID-19 Pandemic
Lu´ıs Cabral
New York University and CEPR
Lei Xu
Bank of Canada
April 2020
Abstract. We test the theory that seller reputation moderates the effect of demand shocks
on a seller’s propensity to price gouge. From mid January to mid March 2020, 3M masks
were priced 2.72 times higher than Amazon sold them in 2019. However, the difference
(in price ratios) between a post-COVID-19 entrant and an established seller is estimated
to be about 1.6 at times of maximum scarcity, that is, post-COVID-19 entrants price at
approximately twice the level of established sellers. Similar results are obtained for Purell
hand sanitizer. We also consider cumulative reviews as a measure of what a seller has to
lose from damaging its reputation and, again, obtain similar results. Finally, we explore
policy implications of our results.
Keywords: price gouging, COVID-19, Amazon.
JEL codes: D01.

http://leixu.org/xu_price_gouging.pdf

 

[BIKER13]

somebody is real bored

 

[Kahrnut]

 

[Cadcom]

I prefer to call it "leveraging the stimulus". "Price gouging" has just been beat to death on here.

 

[Ken Ford]

So there is real data that noobs price gouge and high reputation sellers don't.


Seller Reputation and Price Gouging:
Evidence from the COVID-19 Pandemic
Lu´ıs Cabral
New York University and CEPR
Lei Xu
Bank of Canada
April 2020
Abstract. We test the theory that seller reputation moderates the effect of demand shocks
on a seller’s propensity to price gouge. From mid January to mid March 2020, 3M masks
were priced 2.72 times higher than Amazon sold them in 2019. However, the difference
(in price ratios) between a post-COVID-19 entrant and an established seller is estimated
to be about 1.6 at times of maximum scarcity, that is, post-COVID-19 entrants price at
approximately twice the level of established sellers. Similar results are obtained for Purell
hand sanitizer. We also consider cumulative reviews as a measure of what a seller has to
lose from damaging its reputation and, again, obtain similar results. Finally, we explore
policy implications of our results.
Keywords: price gouging, COVID-19, Amazon.
JEL codes: D01.

http://leixu.org/xu_price_gouging.pdf

Ain’t it a little early for drinking? LOL

 

[Kahrnut]

Ain’t it a little early for drinking? LOL

It's after 5pm in Addis Ababa

 

[BillsCamino]