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Price Dispersion And Demand Uncertainty: Evidence From Us Scanner Data

  • Benjamin Eden

    ()

    (Vanderbilt University)

I use a flexible price version of the Prescott (1975) hotels model to explain variations in price dispersion across goods sold by supermarkets in Chicago. The main finding is that price dispersion measures are positively correlated with proxies for demand uncertainty. I also find that price dispersion measures are negatively correlated with the average price but are not negatively correlated with the revenues from selling the good (across stores and weeks) and with the number of stores that sell the good.

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Paper provided by Vanderbilt University Department of Economics in its series Vanderbilt University Department of Economics Working Papers with number 13-00015.

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Date of creation: 03 Oct 2013
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Handle: RePEc:van:wpaper:vuecon-sub-13-00015
Contact details of provider: Web page: http://www.vanderbilt.edu/econ/wparchive/index.html

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