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

This research investigates how platform-suggested prices influence sellers’ pricing decisions and selling outcomes. In collaboration with Mercari, a peer-to-peer e-commerce platform, the authors conduct a field experiment that varies whether a seller receives a suggested price—and, if so, the suggested price itself. They find that a 30% change in suggested prices leads to a 5% change in listing prices in the same direction. Suggested prices are more influential when pricing is more challenging, such as for new sellers and used items. Lower suggested prices improve both the likelihood of sale and the resulting seller revenue. A subsequent experiment shows that these results are likely to generalize to the full equilibrium. The findings imply that platform-suggested pricing is an effective compromise that guides seller pricing while allowing sellers to incorporate their private information.