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Price Dispersion on the Internet: Empirical Comparison of Several Commodities from the Czech Republic

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  • Jiří Sedláček

Abstract

The first large-scale (909 products, 79,679 individual price listings) empirical study of price dispersion based on data from the Czech Republic's online shops is presented in the paper. First, simple descriptive indicators were calculated for each product. Second, several versions of linear regression models were constructed for each of the 13 product categories and evaluated against the hypotheses. The price dispersion was regressed against its mean market price and the number of shops. For the majority of categories R2 is high or very high (the mean market price variable accounts for 86.6% to 96.7% in the price dispersion) or at least medium (from 56% to 69%). Also, price dispersion (measured by range and standard deviation) remains quite high for the majority of the analyzed product categories. The important role of pricebots for online shop owners and marketing managers and some other findings are also discussed.

Suggested Citation

  • Jiří Sedláček, 2013. "Price Dispersion on the Internet: Empirical Comparison of Several Commodities from the Czech Republic," Central European Business Review, Prague University of Economics and Business, vol. 2013(1), pages 35-42.
    • Handle: RePEc:prg:jnlcbr:v:2013:y:2013:i:1:id:37:p:35-42
    DOI: 10.18267/j.cebr.37
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    References listed on IDEAS

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    1. Randy A. Nelson & Richard Cohen & Frederik Roy Rasmussen, 2007. "An Analysis of Pricing Strategy and Price Dispersion on the Internet," Eastern Economic Journal, Eastern Economic Association, vol. 33(1), pages 95-110, Winter.
    2. Glenn Ellison & Sara Fisher Ellison, 2009. "Search, Obfuscation, and Price Elasticities on the Internet," Econometrica, Econometric Society, vol. 77(2), pages 427-452, March.
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    More about this item

    Keywords

    e-commerce; e-shops; price dispersion; pricebots; shopbots;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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