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Price Dispersion and the Role of Stores

Author

Listed:
  • Espen Moen

    (BI Norwegian Business School)

  • Fredrik Wulfsberg

    (Oslo Business School, Oslo Akershus University College of Applied Sciences)

  • Øyvind Aas

    (Université libre de Bruxelles)

Abstract

This paper studies price dispersion in the Norwegian retail market for 766 products across 4297 stores over 60 months. Price dispersion for homogeneous products is significant and persistent, with a coefficient of variation of 37% for the median product. Price dispersion differs between product categories and over time. Store heterogeneity accounts for 30% of the observed variation in prices for the median product-month and for around 50% for the sample as a whole. Price dispersion is still prevalent after correcting for store heterogeneity.

Suggested Citation

  • Espen Moen & Fredrik Wulfsberg & Øyvind Aas, 2017. "Price Dispersion and the Role of Stores," Working Papers 201704, Oslo Metropolitan University, Oslo Business School.
    • Handle: RePEc:oml:wpaper:201704
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    File URL: http://hdl.handle.net/20.500.12199/1332
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    Cited by:

    1. is not listed on IDEAS
    2. Makoto Hanazono & Noritaka Kudoh, 2024. "Prominence And Market Power: Asymmetric Oligopoly With Sequential Consumer Search," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 65(3), pages 1249-1281, August.
    3. Sofronis Clerides & Pascal Courty & Yupei Ma, 2023. "Store expensiveness and consumer saving: Insights from a new decomposition of price dispersion," Quantitative Marketing and Economics (QME), Springer, vol. 21(1), pages 65-94, March.

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    Keywords

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    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

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