Frictional costs are defined as the disutility related to the conduct of an online transaction. Thus,
frictional costs can accrue through the consumer‘s decision-making process prior to an online
transaction, e.g., bidding in interactive pricing mechanisms like auctions. We present two models for
the measurement of frictional costs in Name-Your-Own-Price auctions where these costs can either be
measured through a discount factor or in absolute values. We compare the fit and estimation results of
these models by analyzing bidding data from a German NYOP seller. Our results show that both
models are equally parsimonious, explain a comparable fraction of variance and both models yield
robust and reasonable parameter estimates.
Hinz, Oliver and Spann, Martin, "Measuring Frictional Costs in E-Commerce: The Case of Name-Your-Own-Price Auctions" (2010). ECIS 2010 Proceedings. 117.