Competition in Online Markets: When Banks Compete, Do Consumers Really Win?

Al-Bahrani, A. (2016). Competition in Online Markets: When Banks Compete, Do Consumers Really Win? Journal of Housing Research, 25(2), 157-170.

14 Pages Posted: 2 Aug 2019

See all articles by Abdullah A. Al-Bahrani

Abdullah A. Al-Bahrani

Northern Kentucky University - Department of Economics and Finance

Date Written: 2016

Abstract

The perceived objective of price comparison sites is to aggregate price quotes from several firms. They are expected to reduce consumers’ search costs and lead to more competitive markets. In this paper, I examine the difference in the prices consumers pay on comparison sites relative to traditional shopping methods. Using a unique data set, a mortgage firm’s pricing strategies on Lendingtree.com, a price comparison site, and in traditional markets are examined. The results indicate that lendingtree.com and traditional consumers pay the same price on average. The presumed benefits from lower search cost on lendingtree.com do not result in lower mortgage prices.

Keywords: Mortgage, Online, Price comparisons, Consumer prices, Loans, Credit scores

JEL Classification: L1, L85, G21

Suggested Citation

Al-Bahrani, Abdullah A., Competition in Online Markets: When Banks Compete, Do Consumers Really Win? (2016). Al-Bahrani, A. (2016). Competition in Online Markets: When Banks Compete, Do Consumers Really Win? Journal of Housing Research, 25(2), 157-170. , Available at SSRN: https://ssrn.com/abstract=3428840

Abdullah A. Al-Bahrani (Contact Author)

Northern Kentucky University - Department of Economics and Finance ( email )

College of Business
BEP 425
Highland Heights, KY 41099
United States

HOME PAGE: http://abdullahalbahrani.com

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