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Price And Price Dispersion On The Web: Evidence From The Online Book Industry Of Taiwan

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  • LIN, YU-CHEN
  • CHEN, CHIANG-MING

Abstract

We study how the levels of market price and price dispersion are associated with consumersʼ search costs and the level of competitiveness in the online market using data collected from the online book industry in Taiwan. Our empirical results show that prices and price dispersion are lower for books that are more often purchased or advertised. Moreover, we find that the big three bookstores and the fringe bookstores price differently when facing competition from their rivals and that price dispersion tend to be lower with the number of competing bookstores.

Suggested Citation

  • Lin, Yu-Chen & Chen, Chiang-Ming, 2014. "Price And Price Dispersion On The Web: Evidence From The Online Book Industry Of Taiwan," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 55(1), pages 51-70, June.
    • Handle: RePEc:hit:hitjec:v:55:y:2014:i:1:p:51-70
    DOI: 10.15057/26811
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    References listed on IDEAS

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    1. Borenstein, Severin & Rose, Nancy L, 1994. "Competition and Price Dispersion in the U.S. Airline Industry," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 653-683, August.
    2. Michael R. Baye & John Morgan & Patrick Scholten, 2004. "Price Dispersion In The Small And In The Large: Evidence From An Internet Price Comparison Site," Journal of Industrial Economics, Wiley Blackwell, vol. 52(4), pages 463-496, December.
    3. Michael R. Baye & John Morgan, 2001. "Information Gatekeepers on the Internet and the Competitiveness of Homogeneous Product Markets," American Economic Review, American Economic Association, vol. 91(3), pages 454-474, June.
    4. Barron, John M. & Taylor, Beck A. & Umbeck, John R., 2004. "Number of sellers, average prices, and price dispersion," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1041-1066, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    internet; price dispersion; information; search;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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