How Effective is Suggested Pricing?: Experimental Evidence from an E-Commerce Platform

We detail research into how platforms like Mercari can guide sellers' pricing decisions. The research, a collaboration with Mercari, involved a large-scale field experiment where sellers were shown different suggested prices or no suggestions at all. Key findings indicate that suggested prices significantly influence seller listing prices, particularly for inexperienced sellers or those listing used items. Furthermore, lower suggested prices led to improved selling outcomes, such as a higher likelihood of sale and increased revenue for both sellers and the platform, without negatively impacting the number of listings. The study addresses potential interference issues in the experimental design and finds that the results, particularly the benefit of lower suggested prices, appear to generalize to platform-wide implementation.