EXPRESS: How Effective Is Suggested Pricing?: Experimental Evidence from an E-Commerce Platform
Jessica Fong et al.
What the paper says
We investigate how platform-suggested prices influence sellers’ pricing decisions and selling outcomes. In collaboration with Mercari, a peer-to-peer e-commerce platform, we conduct a field experiment that varies whether a seller receives a suggested price, and if so, the suggested price itself. We find that a 30% change in suggested prices leads to a 5% change in listing prices in the same direction. Suggested prices are more influential when pricing is more challenging, such as for new sellers and used items. Lower suggested prices improve both the likelihood of sale and the resulting seller revenue. We show, in a subsequent experiment, that these results are likely to generalize to the full equilibrium. Our findings imply that platform-suggested pricing is an effective compromise that guides seller pricing while allowing them to incorporate their private information.
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.50 × 0.4 = 0.20 |
| M · momentum | 0.50 × 0.15 = 0.07 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.