The Behavior of Price Dispersion in a Natural Experiment

Andrzej Skyzypacz and Jerzy D. Koniecyzny
Additional contact information
Andrzej Skyzypacz: Stanford U
Jerzy D. Koniecyzny: Wilfrid Laurier U

Research Papers from Stanford University, Graduate School of Business

Abstract: We study the behavior of prices in Poland following the big-bang market reforms in 1990, using a large, disaggregated data set. Price differences within and across regions are initially large but fall rapidly in the early stages of transition. For most goods, the rapid decline ends within a year. Dispersion is low for goods which are expensive, are bought frequently, constitute a large portion of household expenditures, and in markets characterized by intensive search for the best price. Inflation and inflation variability explain only part of the changes of price dispersion over time. The behavior of price dispersion is consistent with search for the best price and arbitrage. Overall, prices behave as economic theory predicts they would.

Date: 2000-07
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://gsbapps.stanford.edu/researchpapers/library/RP1641.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecl:stabus:1641

Access Statistics for this paper

More papers in Research Papers from Stanford University, Graduate School of Business Contact information at EDIRC.
Bibliographic data for series maintained by ().