scholarly journals Price Dispersion in the Lab and on the Internet: Theory and Evidence

2004 ◽  
Vol 35 (3) ◽  
pp. 449 ◽  
Author(s):  
Michael R. Baye ◽  
John Morgan
Keyword(s):  
Price Dispersion ◽  
The Internet

Prices on the Internet

2010 ◽  
pp. 36-45
Author(s):  
Jihui Chen
Keyword(s):  
Price Dispersion ◽  
Future Research ◽  
The Internet ◽  
Extensive Literature ◽  
Price Information ◽  
Internet Pricing ◽  
Online Retailers ◽  
Wide Range ◽  
Future Research Directions

In the pre-Internet era, consumers relied on media such as Sunday newspapers and flyers for product and price information. Such a search process is time-consuming and unlikely to be exhaustive. Existence of incomplete information has been shown to lead to price dispersion (Stigler, 1961). Recent advances in information technology have dramatically changed the manner by which consumers and businesses gather and transmit information. With a few mouse-clicks, consumers are able to compare price information from a wide range of vendors. With the advent of the Internet, especially the introduction of price comparison sites or shopbots, competition among online retailers escalates and we might expect prices to converge in the new economy. However, substantially decreased transaction cost has apparently not led to online price convergence. An extensive literature on Internet pricing has documented persistent price dispersion in online markets. In this chapter, I review price dispersion and related literatures, and discuss future research directions.

scholarly journals Airline Pricing, Price Dispersion, and Ticket Characteristics On and Off the Internet

2014 ◽  
Vol 6 (1) ◽  
pp. 272-307 ◽  
Author(s):  
Anirban Sengupta ◽  
Steven N. Wiggins
Keyword(s):  
Price Dispersion ◽  
Market Concentration ◽  
The Internet ◽  
Internet Shopping ◽  
Transaction Data ◽  
Airline Pricing ◽  
Load Factors ◽  
The Relationship

This paper uses transaction data to investigate the effects of Internet purchase on airline fares. Our data include ticket characteristics, restrictions, flight load factors, and dates and channel of purchase. Controlling for ticket and flight characteristics, online purchasers pay about 11 percent less than offline purchasers, which seems rooted in more efficient shopping. The results do not support a spillover in terms of reduced fares or dispersion from greater Internet shopping. The paper also uses the data to reevaluate the relationship between market concentration and fares, but fails to identify any statistically significant, robust relationship. (JEL D83, L11, L86, L93)

scholarly journals Information Gatekeepers on the Internet and the Competitiveness of Homogeneous Product Markets

2001 ◽  
Vol 91 (3) ◽  
pp. 454-474 ◽  
Author(s):  
Michael R Baye ◽  
John Morgan
Keyword(s):  
Social Welfare ◽  
Price Dispersion ◽  
Product Market ◽  
Welfare Effects ◽  
The Internet ◽  
Internet Site ◽  
Price Information ◽  
Product Markets ◽  
Homogeneous Product

We examine the equilibrium interaction between a market for price information (controlled by a gatekeeper) and the homogenous product market it serves. The gatekeeper charges fees to firms that advertise prices on its Internet site and to consumers who access the list of advertised prices. Gatekeeper profits are maximized in an equilibrium where (a) the product market exhibits price dispersion; (b) access fees are sufficiently low that all consumers subscribe; (c) advertising fees exceed socially optimal levels, thus inducing partial firm participation; and (d) advertised prices are below unadvertised prices. Introducing the market for information has ambiguous social welfare effects. (JEL D4, D8, M3, L13)

scholarly journals An Analysis of Pricing Strategy and Price Dispersion on the Internet

2007 ◽  
Vol 33 (1) ◽  
pp. 95-110 ◽  
Author(s):  
Randy A Nelson ◽  
Richard Cohen ◽  
Frederik Roy Rasmussen
Keyword(s):  
Price Dispersion ◽  
Pricing Strategy ◽  
The Internet
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