The Effects of Price Rank on Clicks and Conversions in Product List Advertising on Online Retail Platforms

Given the critical role price information plays in consumer decision making, this study examines the impact of price ranking on consumer responses to Product List Advertising (PLA) throughout the year. A hierarchical Bayesian model using a unique dataset from a leading electronic shopping platform and a simulated experiment shows that consumers are more likely to click on extremely high-priced options (d or the lowest) in the early stages of the purchase funnel. ) that consumers use as an anchor to evaluate the wide range of options. Later in the purchase funnel, when clicks turn into purchases, consumers are more likely to click on moderate-priced options that typically compromise price and quality. The impact of price ranking decreases for ads that sponsor more specific keywords and increases for ads that sponsor more popular keywords. o Provide new insights into the role of pricing information in the PLA context and the implications for management in designing effective PLA

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