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What Drives Price Dispersion in the European E-commerce Industry?

Author

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  • Gyódi Kristóf
  • Sobolewski Maciej
  • Ziembiński Michał

    (Faculty of Economic Sciences, University of Warsaw and DELab, Warsaw, Poland)

Abstract

An important aspect of economic integration of the European Union is price convergence on digital single market. In this study, we propose a novel way to measure price dispersion in the e-commerce industry, using a custom made web-scraping tool. We target all the major price comparisons sites in the 26 EU member states, which enables us to collect price signals from thousands of retail shops operating on-line. We analyse pricing data of 182 branded products sold on-line across the EU, representing the most popular categories: fashion, consumer electronics, gaming and software, and cosmetics. We find considerable dispersion of both pre and post-vat on-line prices ranging from 20% to 40%, depending on the product category. The observed on-line price dispersion is driven by both cost factors and the level of per capita income, which is consistent with the view that producers or large distributors might engage in strategic price discrimination induced by income heterogeneity.

Suggested Citation

  • Gyódi Kristóf & Sobolewski Maciej & Ziembiński Michał, 2017. "What Drives Price Dispersion in the European E-commerce Industry?," Central European Economic Journal, Sciendo, vol. 3(50), pages 53-71, December.
  • Handle: RePEc:vrs:ceuecj:v:3:y:2017:i:50:p:53-71:n:4
    DOI: 10.1515/ceej-2017-0017
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    References listed on IDEAS

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    More about this item

    Keywords

    price dispersion; price discrimination; e-commerce; web-scraping; price comparison service;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies

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