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A `Global Village' without borders? International price differentials at eBay

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Author Info
Philipp Maier

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Abstract

One of the key advances of the internet age is the increase in transparency. Does high price transparency imply that consumers in different countries pay the same price for similar goods? We compare prices for new, tradable goods sold via the internet auction site eBay. We find ample evidence that prices differ between countries. This indicates that suffcient scope for price discrimination exists between countries, even in very transparent markets such as online auctions. Moreover, our results show that national borders are a key force driving international price differentials. Contrary to other studies, we do not find that having a currency of one's own drives up cross-border price differentials significantly. Lastly, differences in taxes and shipping costs are important factors in explaining price differentials.

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Paper provided by Netherlands Central Bank, Research Department in its series DNB Working Papers with number 044.

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Date of creation: May 2005
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Handle: RePEc:dnb:dnbwpp:044

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Related research
Keywords: price differentials; online auctions;

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Find related papers by JEL classification:
E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Zhu, Hongwei & Siegel, Michael & Madnick, Stuart, 2008. "Enabling Global Price Comparison through Semantic Integration of Web Data," Working papers 40084, Massachusetts Institute of Technology (MIT), Sloan School of Management. [Downloadable!]
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