Did the Euro Foster Online Price Competition? Evidence from an International Price Comparison Site
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. After controlling for cost, demand, and market structure effects, we show that the pure Euro changeover effect is to raise average prices in the Eurozone by 3% and average minimum prices by 7%. Finally, we develop a model of online pricing in the context of currency unions, and show that these price patterns are broadly consistent with clearinghouse models.
|Date of creation:||2005|
|Date of revision:|
|Publication status:||Published in Economic Inquiry, 2006|
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Web page: http://kelley.iu.edu/bepp/
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