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Law of one price: BigMac versus Fortnite - A Note

Author

Listed:
  • Georg Stadtmann

    (University of Southern Denmark and European-University Viadrina Frankfurt (Oder))

  • Christian Pierdzioch

    (Helmut-Schmidt-University Hamburg)

  • Timo Schöber

    (European-University Viadrina Frankfurt (Oder))

Abstract

We analyze the law of one price (LoP) based on BigMac and Fortnite prices. We find a positive but less than perfect correlation between the over-/undervaluations of the two indices. While we cannot reject the LoP for the Fortnite data, we find that it does not hold for the BigMac data.

Suggested Citation

  • Georg Stadtmann & Christian Pierdzioch & Timo Schöber, 2020. "Law of one price: BigMac versus Fortnite - A Note," Economics Bulletin, AccessEcon, vol. 40(4), pages 3338-3348.
    • Handle: RePEc:ebl:ecbull:eb-20-00179
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    References listed on IDEAS

    as
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    6. Kenneth A. Froot & Michael Kim & Kenneth Rogoff, 2019. "The Law of One Price Over 700 Years," Annals of Economics and Finance, Society for AEF, vol. 20(1), pages 1-35, May.
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    9. Pieters, Gina & Vivanco, Sofia, 2017. "Financial regulations and price inconsistencies across Bitcoin markets," Information Economics and Policy, Elsevier, vol. 39(C), pages 1-14.
    10. Schöber, Timo & Stadtmann, Georg, 2020. "Fortnite: The business model pattern behind the scene," Discussion Papers 415, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.
    11. Mohsen Bahmani‐Oskooee & Scott W. Hegerty, 2009. "Purchasing Power Parity In Less‐Developed And Transition Economies: A Review Paper," Journal of Economic Surveys, Wiley Blackwell, vol. 23(4), pages 617-658, September.
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    Cited by:

    1. Benti, Behailu Shiferaw & Haß, Dominik & Stadtmann, Georg, 2021. "Money illusion in free-to-play games," Discussion Papers 422, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.

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    More about this item

    Keywords

    Fortnite; BigMac; law of one price;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables

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