What is behind price dispersion in e-markets?
by Punit Ahluwalia
International Journal of Services and Standards (IJSS), Vol. 7, No. 3/4, 2011

Abstract: E-markets are more efficient than conventional markets because of better informed consumers, and trivial search and menu costs. Many studies have examined the reasons for price dispersion in retailer differentiated e-markets. This study takes a distinct approach and studies the relationships between the information tools generally available to consumers on e-retailers' websites and price dispersion over a period of time. Consumer reviews, their ratings and brand image are examined as the information sources. The analysis is based on six months retail data extracted from a major e-retailer in the USA. This study also explores the relationship between pricing strategy and the consumer comfort index reported weekly by Bloomberg. The implications for standards and evaluation metrics of e-retail websites are discussed.

Online publication date: Fri, 27-Feb-2015

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