Price Dispersion

What determines a country's ability to compete in international markets? What fosters the global competitiveness of its firms? And in the European context, have key elements of the EU strategy such as EMU and enlargement helped or hindered domestic firms' competitiveness in local and global markets? We address these questions by calibrating and simulating a conceptual framework that, based on Melitz and Ottaviano (2005), predicts that tougher and more transparent international competition drives less productive firms out the market, thereby increasing average productivity as well as reducing average prices and mark-ups. The model also predicts a parallel reduction of price dispersion within sectors. Our conceptual framework allows us to disentangle the effects of technology and freeness of entry from those of accessibility (i.e. the ease for local firms to reach local and foreign consumers). On the one hand, by controlling for the impact of trade frictions, we are able to co...

The authors put forward a sales response model to explain the differences in immediate and dynamic effects of promotional prices and regular prices on sales. The model consists of a vector autoregression rewritten in error-correction format which allows to disentangle the immediate effects from the dynamic effects. In a second level of the model, the immediate price elasticities, the cumulative

We consider a homogenous good oligoply with identical consumers who learn about prices either by (sequentially) visiting firms or by consulting a price agency who sells information about which firm charges the lowest price. In the sequential equilibrium with maximal trade and minimal search, prices are dispersed and consumers randomize between consulting a price agency and buying at the first

During the last two decades, the European Union (EU) has experienced closer market integration through the removal of trade barriers, the establishment of a single market, and the reduction of exchange rate volatility. In addition, there have been several structural reforms in product markets designed to increase competition, monitor cross-country price differences and increase transparency. One anticipated effect of market integration is price convergence, because of the reduced potential for price discrimination across the EU. This paper explores market integration and price convergence in the European pharmaceutical market, which is the fifth largest industry in the EU. Since 1985, many EU directives have been adopted to achieve a single EU-wide pharmaceutical market, with the aim of enhancing the quality of life for European citizens and the European pharmaceutical industry's competitiveness and research and development capability. Using annual 1994-2003 IMS Health data from...

During the last two decades, the European Union (EU) has experienced closer market integration through the removal of trade barriers, the establishment of a single market, and the reduction of exchange rate volatility. In addition, there have been several structural reforms in product markets designed to increase competition, monitor cross-country price differences and increase transparency. One anticipated effect of market integration is price convergence, because of the reduced potential for price discrimination across the EU. This dissertation explores market integration and price convergence in the European pharmaceutical market, which is the fifth largest industry in the EU. Since 1985, many EU directives have been adopted to achieve a single EU-wide pharmaceutical market, with the aim of enhancing the quality of life for European citizens and the European pharmaceutical industry's competitiveness and research and development capability. Using annual 1994--2003 data from f...

Auto rental firms offer a menu of prices that differ across car quality (eg Midsize vs. Economy) and consumer types (Business vs. Leisure customers). This paper analyzes the impact of competition on price discrimination in the auto rental market. We assemble an ...

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 ...

JOURNAL OF INTERACTIVE MARKETING VOLUME 18 / NUMBER 4 / AUTUMN 2004 Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/dir.20019 ... Marketing at the RH Smith School of ... XING PAN, BRIAN T. RATCHFORD, AND VENKATESH ...

The authors examine variability in the price and purity of cocaine and heroin using data gathered over a 14-year period by the System to Retrieve Information from Drug Evidence (STRIDE) of the United States Drug Enforcement Administration. The amount of variability is very great, larger than the variability for any of 15 legal goods for which comparable estimates are available.

La aparición de Internet como nuevo canal de venta directa revolucionó los procesos de búsqueda del consumidor, simplificándolos enormemente. Los motores de búsqueda de precios profundizaron, aún más, el ahorro de tiempo, y de costos de búsqueda consecuentes. La teoría predijo entonces que los precios bajarían hasta niveles cercanos al costo marginal, desapareciendo la dispersión de precios, habitual en los mercados minoristas “presenciales”. Sin embargo, diversos estudios empíricos han demostrado la persistencia de dispersión de precios en distintos mercados minoristas en línea, entre ellos el de transporte aéreo de pasajeros.
Esta investigación pretende indagar sobre la existencia de dispersión temporal de precios en el mercado de transporte aéreo de pasajeros de Argentina, cuando el canal de compras utilizado es Internet. Se buscó comprobar la existencia o no de dispersión temporal de precios e identificar regularidades en la evolución de las tarifas según la anticipación de la compra, en los vuelos de cabotaje (Buenos Aires-Mendoza) y en los vuelos internacionales (Buenos Aires-Madrid y Buenos Aires – Miami) en el período 2019-2021
Se buscó determinar en qué sentido y con qué magnitud se modifican las tarifas a medida que se acerca la fecha del vuelo. Además de identificar diferencias entre tarifas según la compra fue antes o después de las restricciones originadas en la pandemia de COVID-19, verificando si las restricciones sanitarias, que ocasionaron una disminución en la tasa de ocupación de la capacidad instalada, provocaron un aumento generalizado en las tarifas aéreas.

The emergence of semantic web opens up boundless possibilities by enabling software agents to intelligently reason about its content. Over 300 million searches are conducted everyday on the Internet by people trying to find what they need. A majority of these searches are in the domain of consumer ecommerce, where a web user is looking for something to buy. This represents a huge cost in terms of people hours and an enormous drain of resources. Agent enabled semantic search will have a dramatic impact on the ...

It has been hypothesized that the online medium and the Internet lower search costs and that electronic markets are more competitive than conventional markets. This suggests that price dispersion of an item with the same measured characteristics across sellers at a given point in time for identical products sold by e-tailers online should be smaller than it is offline, but some recent empirical evidence reveals the opposite. Based on an empirical analysis of 105 e-tailers comprising 6.739 price observations for 581 items in eight product categories, the authors show that online price dispersion is persistent, even after controlling for e-tailer heterogeneity. The general conclusion is that the proportion of the price dispersion explained by e-tailer characteristics is small. Also, after controlling for differences in e-tailer service quality, prices at pure-play e-tailers are equal to or lower than those at bricks-and-clicks e-tailers for all categories except books and computer software.

The Netherlands introduced a new health insurance system in January 2006, a system based on managed competition. Such a system critically hinges on consumers that search. It is for this reason we think it is important to investigate the extend to which consumers search, how they search and why they search ´or don’t search. The price dispersion observed in the insurance market after the reform suggests the number of consumers that searches is low. We set up a search model for insurance that includes the main features of the Dutch health insurance market after the reform and test the hypotheses from this model on the data.