![]() Offline stores of hybrid retailers have identical within-same-chain-store prices in 78 per cent, while online and offline price levels are uniform in 72 per cent of the cases. Using a dataset of the twenty largest multi-channel companies in ten countries, Cavallo (2017) finds that most hybrid retailers have a single price online regardless of the location of the buyer. Even for geographically segmented markets with different income levels, price variations within chains are negligible compared with price dispersion among stores of different chains ( DellaVigna and Gentzkow 2019). While international companies tend to use uniform pricing within currency unions ( Cavallo, Neiman, and Rigobon 2014), online disclosure of prices reduces price dispersion in traditional offline retailing ( Ater and Rigbi 2018). ![]() Baker, Marn, and Zawada 2001 Fudenberg and Villas-Boas 2012), lower managerial decision-making costs, as well as online transparency and fairness concerns ( Cavallo 2018 Mookherjee, Lee, and Sung 2021), seem to be powerful arguments for identical pricing in all channels of multi-channel retailers. Although recent developments in information technology and the increasing popularity of e-commerce provide sellers with access to consumer information that might create favourable conditions for the application of third-degree price discrimination (e.g. Strategic pricing and quality signalling ( Wang and Li 2020), consumer loyalty ( Reichheld and Schefter 2000), information overload ( Grover, Lim, and Ayyagari 2006), price adjustment costs ( Böheim, Hackl, and Hölzl-Leitner 2021), or use of price promotions ( Cavallo 2017) keep prices for the same products across retailers from being identical even online.Įven if between-retailer price dispersion has not ceased with the development of e-commerce ( Gorodnichenko, Sheremirov, and Talavera 2018), the online market maturation seems to have guided companies towards uniform pricing across their own physical and online stores. IntroductionĪlthough information economics predicts that online retailing eventually brings about a reduction in price dispersion ( Bakos 1997), an increased market efficiency ( Biswas 2004), and a nearly competitive market ( Brynjolfsson and Smith 2000), price discrepancies are still observed in domestic and international markets alike ( Anania and Nisticò 2014 Duch-Brown et al. ![]() Electronic commerce, Grocery sector, Online retailing, Price dispersion 1. ![]()
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