Although pricing strategy in marketing is a crucial issue, there islittle literatureon the relationship between pricing and sellers’ reputation based on dynamic pricing data. Using data on Taobao.com, we compare pricing behaviors of two types of sellers, business sellers (T-Mall sellers) which have higher reputation and individual sellers (Tao sellers) which have relatively lower reputation. We findthat sellers with different reputation levels will choose different pricing strategies and high-reputation sellers will have advantages in pricing. More specifically, our results reveal thatwhen a T-Mall seller enters into a market as a new extant it will be more likely to sethigher initial price than a Tao seller. In addition the magnitudes of price adjustments of Tao sellers have significant correlation with price changes in T-Mall market.On contrary, prices changes of T-mall sellers are not influenced by price changes in Tao market.
Xu, Min and Ye, Qiang, "Reputation and pricing strategies in online market" (2015). WHICEB 2015 Proceedings. 1.