Are they always offering the lowest price? An empirical analysis of the persistence of price dispersion in a low inflation environment

Sebnem Bahadir-Lust, Jens-Peter Loy and Christoph Weiss
Additional contact information
Sebnem Bahadir-Lust: Department of Economics, Vienna University of Economics and Business Administration, Vienna, Austria, Postal: Department of Economics, Vienna University of Economics and Business Administration, Vienna, Austria
Jens-Peter Loy: Department of Agricultural Economics, University of Kiel, Kiel, Germany, Postal: Department of Agricultural Economics, University of Kiel, Kiel, Germany

Managerial and Decision Economics, 2007, vol. 28, issue 7, 777-788

Abstract: We study the existence of price distributions and the intra-distribution dynamics for 10 food products across 131 retail stores in Germany for a time period of 43 weeks. Based upon Varian's (1980) model of sales, we aim at investigating whether the position of stores within the cross-sectional price distribution is persistent or changes over time (mixed-strategy equilibrium). Our results suggest a substantial degree of price dispersion even after controlling for unobserved store heterogeneity. Despite some intra-distribution dynamics, we find evidence for a persistence of stores in the cross-sectional price distribution over time. Copyright © 2007 John Wiley & Sons, Ltd.

Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://hdl.handle.net/10.1002/mde.1376 Link to full text; subscription required (text/html)

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:wly:mgtdec:v:28:y:2007:i:7:p:777-788

DOI: 10.1002/mde.1376

Access Statistics for this article

Managerial and Decision Economics is currently edited by Antony Dnes

More articles in Managerial and Decision Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().