Price Dispersion in the Online Auction Markets

Sha Luo

EERI Research Paper Series from Economics and Econometrics Research Institute (EERI), Brussels

Abstract: Along the standard measures of price dispersion, this paper proposes a new method, the residual variance model, to examine the levels of price and price variation within and across 10 kinds of physically identical products on eBay UK. The results find that the price levels and price dispersions on eBay are lower than the ones reported in the prior literature regarding other online markets, but the ’law of one price’ has not prevailed in any sample category. It further suggests an important interaction between the extent of price dispersion and the heterogeneities of consumers and sellers.

Keywords: Price Dispersion; Online Auction Markets. (search for similar items in EconPapers)
JEL-codes: D44 D49 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2009-07-07
New Economics Papers: this item is included in nep-mic and nep-mkt
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Persistent link: https://EconPapers.repec.org/RePEc:eei:rpaper:eeri_rp_2009_07

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