1、Page 1 of 36 I.Executive Summary 123 _ This paper analyzes the competitive interplay of prices amongst retail channels:offline(brick-and-mortar)and online(such as retailers websites and online marketplaces).We find evidence of a close competitive relationship between the two channels,in which prices

2、 correspond tightly across channels.We find that prices are highly responsive to changes in the other channel;in other words,when offline prices increase(or decrease),online prices tend to respond by also increasing(or decreasing).This means that consumers online face similar pricing trends to consu

3、mers offline,and the competition between different retailers and across channels is vigorous.We specifically find that online prices are more responsive to brick-and-mortar prices than the reverse,which is consistent with the technological capacity for online prices to adjust more rapidly than brick

4、-and-mortar price tags.Both brick-and-mortar and online prices react similarly 1 This research was funded by the Computer&Communications Industry Association(https:/www.ccianet.org/).2 Rosa Abrantes-Metz is a Principal at the Brattle Group and the Co-Chair of Global Antitrust and Competition practic

5、e(Rosa.Abrantes-M).3 Mame Maloney is a Senior Associate at the Brattle Group(Mame.MaloneyB).Competitive Dynamics of Online and Brick-and-Mortar Retail Prices PREPARED BY1 Rosa Abrantes-Metz2 Mame Maloney3 Page 2 of 36 when they are the lower price,and tend to adjust upwards.But their responses are c

6、learly different when they are the higher price:brick-and-mortar prices will tend to stay high,while online prices will be pulled down to lower levels.This is consistent with intense price competition both within and across retail channels.For the set of products analyzed at the national aggregate l