ON FRUITFUL AND FUTILE TESTS OF THE RELATIONSHIP BETWEEN SEARCH AND PRICE DISPERSION

Joshua Sherman; Avi Weiss

doi:https://doi.org/10.1111/ecin.12449

ON FRUITFUL AND FUTILE TESTS OF THE RELATIONSHIP BETWEEN SEARCH AND PRICE DISPERSION

Joshua Sherman, Avi Weiss

Department of Economics

Bar-Ilan University

Research output: Contribution to journal › Article › peer-review

Abstract

We exploit cross-sectional and temporal differences in search intensity in order to examine the relationship between search costs and price dispersion using a hand-collected panel data set from Jerusalem's Shuk Mahane Yehuda outdoor market. We present empirical evidence that price dispersion increases with the cost of search using several different measures of price dispersion; however, our interpretation of this finding is sensitive to the search proxy in question. We also address several acute difficulties facing empiricists seeking to test theoretical price-dispersion models in which consumers are heterogeneous in their search behavior. (JEL L11, L13).

Original language	English
Pages (from-to)	1898-1918
Number of pages	21
Journal	Economic Inquiry
Volume	55
Issue number	4
DOIs	https://doi.org/10.1111/ecin.12449
State	Published - Oct 2017

All Science Journal Classification (ASJC) codes

Economics and Econometrics
General Business,Management and Accounting

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title = "ON FRUITFUL AND FUTILE TESTS OF THE RELATIONSHIP BETWEEN SEARCH AND PRICE DISPERSION",

abstract = "We exploit cross-sectional and temporal differences in search intensity in order to examine the relationship between search costs and price dispersion using a hand-collected panel data set from Jerusalem's Shuk Mahane Yehuda outdoor market. We present empirical evidence that price dispersion increases with the cost of search using several different measures of price dispersion; however, our interpretation of this finding is sensitive to the search proxy in question. We also address several acute difficulties facing empiricists seeking to test theoretical price-dispersion models in which consumers are heterogeneous in their search behavior. (JEL L11, L13).",

author = "Joshua Sherman and Avi Weiss",

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ER -

ON FRUITFUL AND FUTILE TESTS OF THE RELATIONSHIP BETWEEN SEARCH AND PRICE DISPERSION

Abstract

All Science Journal Classification (ASJC) codes

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