Did the Euro Foster Online Price Competition? Evidence from an International Price Comparison Site

15 Pages Posted: 5 Jun 2006

See all articles by Michael R. Baye

Michael R. Baye

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy

John Morgan

University of California, Berkeley - Economic Analysis & Policy Group

Rupert Gatti

University of Cambridge - Faculty of Economics

Paul Kattuman

University of Cambridge - Judge Business School

Abstract

We study the impact of the Euro on prices charged by online retailers within the European Union. Our data span the period before and after the Euro was introduced, cover a variety of products, and include countries inside and outside of the Eurozone. After controlling for cost, demand, and market structure effects, we show that the pure Euro changeover effect is to raise average prices in the Eurozone by 3% and average minimum prices by 7%. Finally, we develop a model of online pricing in the context of currency unions and show that these price patterns are broadly consistent with those of clearinghouse models.

Suggested Citation

Baye, Michael Roy and Morgan, John and Gatti, J. Rupert J. and Kattuman, Paul A., Did the Euro Foster Online Price Competition? Evidence from an International Price Comparison Site. Economic Inquiry, Vol. 44, No. 2, pp. 265-279, April 2006. Available at SSRN: https://ssrn.com/abstract=906378

Michael Roy Baye (Contact Author)

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )

Bloomington, IN 47405
United States
812-855-2779 (Phone)
812-855-3354 (Fax)

John Morgan

University of California, Berkeley - Economic Analysis & Policy Group ( email )

Berkeley, CA 94720
United States
510-642-2669 (Phone)
810-885-5959 (Fax)

HOME PAGE: http://faculty.haas.berkeley.edu/rjmorgan/

J. Rupert J. Gatti

University of Cambridge - Faculty of Economics ( email )

Austin Robinson Building
Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom
+44 1223 339929 (Phone)

Paul A. Kattuman

University of Cambridge - Judge Business School ( email )

Trumpington Road
Cambridge CB2 1AG
United Kingdom
+44 1223 764 136 (Phone)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
22
Abstract Views
570
PlumX Metrics