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Law of one price: BigMac versus Fortnite - A Note

Author

Listed:
  • Georg Stadtmann

    (University of Southern Denmark and European-University Viadrina Frankfurt (Oder))

  • Christian Pierdzioch

    (Helmut-Schmidt-University Hamburg)

  • Timo Schöber

    (European-University Viadrina Frankfurt (Oder))

Abstract

We analyze the law of one price (LoP) based on BigMac and Fortnite prices. We find a positive but less than perfect correlation between the over-/undervaluations of the two indices. While we cannot reject the LoP for the Fortnite data, we find that it does not hold for the BigMac data.

Suggested Citation

  • Georg Stadtmann & Christian Pierdzioch & Timo Schöber, 2020. "Law of one price: BigMac versus Fortnite - A Note," Economics Bulletin, AccessEcon, vol. 40(4), pages 3338-3348.
    • Handle: RePEc:ebl:ecbull:eb-20-00179
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    References listed on IDEAS

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    9. Chien-Fu Chen & Chien-an Andy Wang & Chung-Hua Shen, 2007. "Does PPP hold for Big Mac price or consumer price index? Evidence from panel cointegration," Economics Bulletin, AccessEcon, vol. 6(16), pages 1-15.
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    Cited by:

    1. Benti, Behailu Shiferaw & Haß, Dominik & Stadtmann, Georg, 2021. "Money illusion in free-to-play games," Discussion Papers 422, European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics.

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    More about this item

    Keywords

    Fortnite; BigMac; law of one price;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables

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