Brattle Consultants Discuss the Competitive Dynamics of Online and Brick-and-Mortar Retail Prices
Published by Competition Policy International
Principal and Co-Leader of Brattle’s Global Antitrust & Competition practice Dr. Rosa Abrantes-Metz and Senior Associate Mame Maloney have coauthored an article for Competition Policy International analyzing the competitive interplay of prices among online and offline retail channels.
Following an empirical analysis drawing from both a hand-collected price dataset and a national aggregate scanner dataset, the authors found evidence of a close competitive relationship between offline (such as brick-and-mortar stores) and online (such as retailers’ websites and online marketplaces) retail channels. After controlling for retailer and location, the authors find that online and offline prices are identical 95% of the time. Moreover, prices in one channel are highly responsive to changes in the other channel’s prices, though online prices are slightly more responsive to brick-and-mortar prices than the reverse. Therefore, regulation affecting online commerce would be expected to affect brick-and-mortar prices, and vice versa.
The full article, “Competitive Dynamics of Online and Brick-and-Mortar Retail Prices,” is available for download below.
