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

The first large scale (almost 500 products, 64,300 individual price listings) empirical study of price dispersion based on the data from the Czech Republic’s e‑shops is presented in the paper. First, simple descriptive indicators like average, max, min, median and standard deviation were calculated...

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Bibliographic Details
Published in:Central European business review 2013-01, Vol.2 (1), p.35-42
Main Author: Sedláček, Jiří
Format: Article
Language:English
Subjects:
Commodities
Consumers
Economy
Electronic commerce
Hypotheses
Internet
Market prices
Marketing
Price elasticity
Prices
Regression analysis
Shopping
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Summary:The first large scale (almost 500 products, 64,300 individual price listings) empirical study of price dispersion based on the data from the Czech Republic’s e‑shops is presented in the paper. First, simple descriptive indicators like average, max, min, median and standard deviation were calculated for each product. Second, several versions of linear regression models were constructed for each of 10 product categories and evaluated against hypotheses.The price dispersion (measured as a price range or by the standard deviation method) was regressed against its mean market price and number of e-shops. At least one regression model is significant for each product category. For the majority of categories R2 is high or very high (the mean market price variable accounts for 86% to 96.7% in the price dispersion) or at least medium (61.5% or 69%). Some other findings and the important role of pricebots for e-shop owners and marketing managers are also discussed.
ISSN:1805-4862
1805-4854
1805-4862
DOI:10.18267/j.cebr.37