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Outline Pricing and the Euro Changeover: Cross-Country Comparisons

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Author Info

  • Kattuman, Paul

    (University of Cambridge)

  • Michael R Baye
  • Rupert Gatti
  • John Morgan

Abstract

We study the impact of the Euro on prices charged by online retailers within the EU. Our data spans the period before and after the Euro was introduced, covers a variety of products, and includes countries inside and outside of the Eurozone. Our main finding is that the Euro changeover in 2002 neither mitigated price differences nor resulted in purchasing power parity for products sold online. In fact, evidence suggests that online prices in the Eurozone actually increased compared to prices of EU countries outside the Eurozone. Further, contrary to the predictions of purchasing-power-parity, we find significant differences in the prices charged by firms both within and across seven countries in the European Union. We also find significant differences in both the average price charged and the best price available in these countries. These conclusions are robust to a variety of controls.

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Bibliographic Info

Paper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2003 with number 117.

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Date of creation: 04 Jun 2003
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Handle: RePEc:ecj:ac2003:117

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Web page: http://www.res.org.uk/society/annualconf.asp
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Related research

Keywords: price competition; Euro; internet;

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Cited by:
  1. Cellini, Roberto & Paolino, Alessandro, 2007. "Price of recreational products and the exchange rate: an empirical investigation on US data," MPRA Paper 5194, University Library of Munich, Germany.
  2. Philipp Maier, 2005. "A global village without borders? international price differentials at eBay," Proceedings, Board of Governors of the Federal Reserve System (U.S.).
  3. Bergin, Paul & Glick, Reuven, 2005. "Tradability, Productivity, and Understanding International Economic Integration," Working Papers 05-14, University of California at Davis, Department of Economics.
  4. Gatti, J.R.J. & Kattuman, P., 2003. "Online Price Dispersion Within and Between Seven European Countries," Cambridge Working Papers in Economics 0343, Faculty of Economics, University of Cambridge.

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