 Why is Price Dispersion Higher Online than Offline? The Impact of Retailer Type and Shopping Risk on Price DispersionHejun Zhuang, Peter Popkowski Leszczyc and Yuanfang Lin Journal of Retailing, 2018, vol. 94, issue 2, 136-153 Abstract: When physically similar products, of similar quality, are offered by retailers both online and offline, we often observe that the dispersion in prices of these products online is greater than the price dispersion offline. This observation runs counter to early theories that suggested price dispersion online would be smaller than that offline due to the ease of search and information availability online. This paper investigates and provides an explanation for this puzzling phenomenon by examining the impact of two important drivers of price dispersion: retailer type and consumers’ shopping risk. Retailer type refers to whether a retailer is a pure offline, pure online, or dual channel retailer. Shopping risk is defined as the product of consumers’ perceived risk of shopping and the transaction uncertainty related to shopping at different types of retailers. Keywords: Online and offline price dispersion; Retailer type; Shopping risk; Consumer search; Pricing strategy; Game theory (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jouret:v:94:y:2018:i:2:p:136-153 DOI: 10.1016/j.jretai.2018.01.003 Access Statistics for this article Journal of Retailing is currently edited by A. Roggeveen More articles in Journal of Retailing from Elsevier |
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