Quotation Böheim, Rene, Hackl, Franz, Hölzl-Leitner, Michael. 2019. The impact of price adjustment costs on price dispersion in E-commerce.


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Abstract

We analyze price dispersion using panel data from a large price comparison site. We use past pricing behavior to instrument for potential endogeneity that might result from the selection of firms to certain product markets. We find that greater price adjustment costs result in greater price dispersion. Although the impact of price adjustment costs on price dispersion became weaker over time, the causal effect of price adjustment costs on price dispersion is still present at the end of the period. Our results are robust to many alternative empirical speciffications. We also test a range of alternative explanations of price dispersion, such as search cost, service differentiation, obfuscation, vertical restraints, and market structure.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Working/discussion paper, preprint
Language English
Title The impact of price adjustment costs on price dispersion in E-commerce
Year 2019
URL http://epub.wu.ac.at/id/eprint/6861
JEL D40, L11

Associations

People
Böheim, Rene (Former researcher)
External
Hackl, Franz (Johannes Kepler Universität Linz, Austria)
Hölzl-Leitner, Michael (Johannes Kepler Universität Linz, Austria)
Organization
Institute for Labor Economics IN (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
5304 Labour market research (Details)
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