The Evolution of Price Dispersion in Internet Retail Markets

37 Pages Posted: 2 Oct 2003

See all articles by Xing Pan

Xing Pan

Independent

Brian T. Ratchford

University of Texas at Dallas

Venkatesh Shankar

Texas A&M University - Department of Marketing

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Abstract

We investigate how online price dispersion has evolved since the bursting of the Internet bubble by comparing price dispersion levels in years 2000, 2001, and 2003 and between multi-channel and pure play e-tailers. The results show that, although online price dispersion declined between 2000 and 2001 when there was a shakeout in Internet retailing, it increased from 2001 to 2003, the post bubble period, in particular, for desktop computers, laptop computers, PDAs, electronics and software. The proportion of items for which price dispersion at multi-channel retailers was higher than that at pure play e-tailers, increased steadily during 2000-2003. These findings suggest that online price dispersion is persistent even as Internet markets mature.

Keywords: Pricing, e-commerce, e-tailing, internet marketing, information economics

JEL Classification: D40, L11, L81, L86, M31

Suggested Citation

Pan, Xing and Ratchford, Brian T. and Shankar, Venkatesh, The Evolution of Price Dispersion in Internet Retail Markets. Available at SSRN: https://ssrn.com/abstract=437940 or http://dx.doi.org/10.2139/ssrn.437940

Brian T. Ratchford

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

Venkatesh Shankar

Texas A&M University - Department of Marketing ( email )

430 Wehner
College Station, TX 77843-4218
United States

HOME PAGE: http://www.venkyshankar.com

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