Price Dispersion in the Lab and on the Internet: Theory and Evidence
Price dispersion is ubiquitous in settings that closely approximate textbook Bertrand competition. We show that only a little bounded rationality among sellers is needed to rationalize such dispersion. A variety of statistical tests, based on datasets from two independent laboratory experiments and...
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| Veröffentlicht in: | The Rand journal of economics 2004, Vol.35 (3), p.449-466 |
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| container_end_page | 466 |
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| container_title | The Rand journal of economics |
| container_volume | 35 |
| creator | Baye, Michael R. Morgan, John |
| description | Price dispersion is ubiquitous in settings that closely approximate textbook Bertrand competition. We show that only a little bounded rationality among sellers is needed to rationalize such dispersion. A variety of statistical tests, based on datasets from two independent laboratory experiments and structural estimates of the parameters of our models, suggest that bounded-rationality-based theories of price dispersion organize the data remarkably well. Evidence is also presented to suggest that the models are consistent with data from a leading Internet price comparison site. |
| doi_str_mv | 10.2307/1593702 |
| format | Article |
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| identifier | ISSN: 0741-6261 |
| ispartof | The Rand journal of economics, 2004, Vol.35 (3), p.449-466 |
| issn | 0741-6261 1756-2171 |
| language | eng |
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| source | Business Source Complete; JSTOR |
| subjects | Analysis Average prices Bounded rationality Consumer prices Cumulative distribution functions Duopolies Economic models Economic theory Electronic commerce Empirical evidence Internet Market prices Monopoly Nash equilibrium Online shopping Price fixing Prices and rates Pricing policies Studies |
| title | Price Dispersion in the Lab and on the Internet: Theory and Evidence |
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