Relative Price Dispersion: Evidence and Theory

Greg Kaplan, Guido Menzio, Leena Rudanko and Nicholas Trachter

American Economic Journal: Microeconomics, 2019, vol. 11, issue 3, 68-124

Abstract: Relative price dispersion refers to persistent differences in the price that different retailers set for one particular good relative to the price they set for other goods. Relative price dispersion accounts for 30 percent of the overall variance of prices at which the same good is sold during the same week and in the same market. Relative price dispersion can be rationalized as the consequence of a pricing strategy used by sellers to discriminate between high-valuation buyers who need to make all of their purchases in one store, and low-valuation buyers who are able to purchase different items in different stores.

JEL-codes: D83 L11 L21 L81 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/mic.20170126
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Citations: View citations in EconPapers (34)

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Related works:
Working Paper: Relative price dispersion: evidence and theory (2016)
Working Paper: Relative Price Dispersion: Evidence and Theory (2016)
Working Paper: Relative Price Dispersion: Evidence and Theory (2016)
Working Paper: Relative Price Dispersion: Evidence and Theory (2016)
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