IDEAS home Printed from
   My bibliography  Save this article

Homogenous goods markets: an empirical study of price dispersion on the internet


  • Thierry Warin
  • Daniel Leiter


This paper presents the results of an empirical study of price dispersion in homogenous goods markets. Modern economic theory suggests that markets will inevitably have information asymmetries resulting in equilibriums with price dispersion even when goods are perfectly homogenous. Earlier studies have tried to explain price dispersion in online markets using variables not related to information: seller characteristics, market competitiveness and time of entry. Our study enhances the previous literature by focusing exclusively on information. In this paper, we employ both cross-sectional and time series data gathered directly from, one of the internet's most popular and comprehensive online shopping/price-comparison sites. We show that, unsurprisingly, price dispersion exists in online markets for the same reason it exists in traditional retail markets: 'noisy monopolists' that create information asymmetries in their quest for monopolistic profits.

Suggested Citation

  • Thierry Warin & Daniel Leiter, 2012. "Homogenous goods markets: an empirical study of price dispersion on the internet," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 4(5), pages 514-529.
  • Handle: RePEc:ids:ijecbr:v:4:y:2012:i:5:p:514-529

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Saralees Nadarajah & Xiao Jiang & Jeffrey Chu, 2017. "Comparisons of smallest order statistics from Pareto distributions with different scale and shape parameters," Annals of Operations Research, Springer, vol. 254(1), pages 191-209, July.
    2. Andrés Martínez, María-Encarnación & Alfaro Navarro, José-Luis & Trinquecoste, Jean-François, 2017. "The effect of destination type and travel period on the behavior of the price of airline tickets," Research in Transportation Economics, Elsevier, vol. 62(C), pages 37-43.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijecbr:v:4:y:2012:i:5:p:514-529. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Carmel O'Grady) The email address of this maintainer does not seem to be valid anymore. Please ask Carmel O'Grady to update the entry or send us the correct email address. General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.