TY - UNPB
T1 - Existence and Persistence of Price Dispersion
T2 - an Empirical Analysis
AU - Lach, Saul
N1 - January 2002.
PY - 2002
Y1 - 2002
N2 - Using a unique data set on store-level monthly prices of four homogenous products sold in Israel, I study the existence and characteristics of the dispersion of prices across stores, as well as its persistence over time. I find that price dispersion prevails even after controlling for observed and unobserved product heterogeneity. Moreover, intra-distribution mobility is significant: stores move up and down the cross-sectional price distribution. Thus, consumers cannot learn about stores that consistently post low prices. As a consequence, price dispersion does not disappear and persists over time as predicted by Varian's (1980) model of sales.
AB - Using a unique data set on store-level monthly prices of four homogenous products sold in Israel, I study the existence and characteristics of the dispersion of prices across stores, as well as its persistence over time. I find that price dispersion prevails even after controlling for observed and unobserved product heterogeneity. Moreover, intra-distribution mobility is significant: stores move up and down the cross-sectional price distribution. Thus, consumers cannot learn about stores that consistently post low prices. As a consequence, price dispersion does not disappear and persists over time as predicted by Varian's (1980) model of sales.
U2 - 10.3386/w8737
DO - 10.3386/w8737
M3 - מסמך עבודה
T3 - NBER working paper series
BT - Existence and Persistence of Price Dispersion
PB - National Bureau of Economic Research
CY - Cambridge, Mass
ER -