ORDERED SEARCH, INTRAPLATFORM COMPETITION AND AN INVISIBLE MARKET BOUNDARY—EVIDENCE FROM CHINESE E-COMMERCE PLATFORMS

Abstract

Using data from three leading e-commerce platforms in China, we study the impact of the dispersion of sellers’ ranking positions on the price dispersion of homogeneous commodities. The major findings are as follows: The dispersion of the ranking positions of sellers weakens market competition and intensifies price dispersion. The dispersion of ranking positions has a heterogeneous effect on sellers’ pricing strategies with different ranking positions. In addition, under the combined action of search costs and long-tail effects in e-commerce markets, there is an invisible market boundary in online markets.