Popularity and Transaction Prices as Drivers of Price Dispersion on Two-Sided Digital Platforms
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Abstract
Objective: the increase in e-commerce transactions has resulted in the understanding of the dynamics of pricing in digital marketing in B2B and B2C environments. This is crucial for capturing buyer preferences and influencing store profitability. Our empirical study reviews how factors such as product popularity, transaction volume, price adjustments, and shipping time influence price dispersion on two-sided e-commerce platforms. Methods: panel data regression models were estimated using a comprehensive dataset from different product categories. Results: the main findings reveal a negative influence of product popularity on price dispersion, suggesting stronger competition and buyer engagement as potential drivers. A positive association between transaction volume and price dispersion also highlights the effect of efficient marketing strategies. Conclusions: the research is important because it sheds light on variables that are significant for transactions on digital twosided platforms, such as product popularity. It also assists managers in efficiently planning pricing strategies, product promotion, and reputation management.
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