Higher Price at Electronic Marketplace

Abstract

Bakos advocated “Reduced Price Hypothesis.” In electronic market or in electronic commerce environment, he insisted, by reducing search cost competition among sellers is intensified then prices become lower. Lee et al. confirmed the prices at AUCNET auction are higher than those at traditional auctions. He provided suppositions on the mechanism of higher prices, however, he cannot prove it due to the lack of data. We analyze the factors contribute of these higher prices at AUCNET auction using questionnaire to auction users. Then we found out electronic market make competition more intensified among buyers than sellers. We conclude, even in an electronic market, price move relatively higher in particular market circumstances.