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arXiv · 2411.07808

Spatial Competition on Psychological Pricing Strategies -- Preliminary Evidence from an Online Marketplace

Magdalena Schindl·Felix Reichel
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Abstract

This paper investigates whether spatial proximity shapes psychological-pricing choices on Austria's C2C marketplace willhaben. Two web-scraped snapshots of 826 Woom Bike listings - a standardised product sold on the platform reveal that sellers near direct competitors are more likely to adopt 9-, 90-, or 99-ending prices, who also use such pricing strategy unconditional on product characteristics or underlying spatiotemporal differences. Such strategy is associated with an average premium of approximately cet. par. 3.4 %. Information asymmetry persists: buyer trust hinges on signals such as the "Trusted Seller" badge, and missing data on the "PayLivery" feature. Lacking final transaction prices limits inference.

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Magdalena Schindl, Felix Reichel. 2024-11-12. Spatial Competition on Psychological Pricing Strategies -- Preliminary Evidence from an Online Marketplace. https://doi.org/10.33423/jabe.v27i6.8044

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