A Measurement of Price Dispersion and Search Cost in China’s Online Stores

Research Article
Open access

A Measurement of Price Dispersion and Search Cost in China’s Online Stores

Zian Liu 1 , Zewen Wang 2*
  • 1 Harrow Beijing    
  • 2 United World College Changshu China    
  • *corresponding author 3252216130@qq.com
Published on 13 September 2023 | https://doi.org/10.54254/2754-1169/8/20230335
AEMPS Vol.8
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-915371-43-0
ISBN (Online): 978-1-915371-44-7

Abstract

We studied a measurement of price dispersion and search cost to find implications of relative search cost. We investigated several models, including the classical search cost model, price dispersion estimation model and Stahl's consumers' gain model. According to the data we collected, the empirical analysis explores absolute search cost, relative search cost, consumers' gain from search, competitive prices, and comment-weighted gradings based on the settings. With the hypothesis that we clarified and statistics applications, this paper attempts to illustrate that price dispersion among online book retailers increases as price rises. Besides, we testified to the effects of information and discovered that online shopping isn't frictionless. Last, we tested the correlation between gradings and search cost to testify our conclusions. The results are statistically significant under a 5% p-value.

Keywords:

price dispersion, search cost, Stahl’s model, reservation price

Liu,Z.;Wang,Z. (2023). A Measurement of Price Dispersion and Search Cost in China’s Online Stores. Advances in Economics, Management and Political Sciences,8,318-326.
Export citation

References

[1]. Stigler, G. J. (1961). The Economics of Information. Journal of Political Economy, 69(3), 213–225. https://doi.org/10.1086/258464.

[2]. De los Santos, Babur, Ali Hortaçsu, and Matthijs R. Wildenbeest. "Testing models of consumer search using data on web browsing and purchasing behavior." American economic review 102.6 (2012): 2955-80.

[3]. Stahl, Dale O. "Oligopolistic pricing with sequential consumer search." The American Economic Review (1989): 700-712.

[4]. Varian, Hal R. "Big data: New tricks for econometrics." Journal of Economic Perspectives 28.2 (2014): 3-28.

[5]. Baye, Michael R., and John Morgan. "Information gatekeepers and price discrimination on the internet." Economics Letters 76.1 (2002): 47-51.

Cite this article

Liu,Z.;Wang,Z. (2023). A Measurement of Price Dispersion and Search Cost in China’s Online Stores. Advances in Economics, Management and Political Sciences,8,318-326.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

Disclaimer/Publisher's Note

The statements, opinions and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of EWA Publishing and/or the editor(s). EWA Publishing and/or the editor(s) disclaim responsibility for any injury to people or property resulting from any ideas, methods, instructions or products referred to in the content.

About volume

Volume title: Proceedings of the 2nd International Conference on Business and Policy Studies

ISBN：978-1-915371-43-0(Print) / 978-1-915371-44-7(Online)
Editor：Javier Cifuentes-Faura, Canh Thien Dang
Conference website: https://2023.confbps.org/
Conference date: 26 February 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.8
ISSN：2754-1169(Print) / 2754-1177(Online)

© 2024 by the author(s). Licensee EWA Publishing, Oxford, UK. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license. Authors who publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open access policy for details).

References

[1]. Stigler, G. J. (1961). The Economics of Information. Journal of Political Economy, 69(3), 213–225. https://doi.org/10.1086/258464.

[2]. De los Santos, Babur, Ali Hortaçsu, and Matthijs R. Wildenbeest. "Testing models of consumer search using data on web browsing and purchasing behavior." American economic review 102.6 (2012): 2955-80.

[3]. Stahl, Dale O. "Oligopolistic pricing with sequential consumer search." The American Economic Review (1989): 700-712.

[4]. Varian, Hal R. "Big data: New tricks for econometrics." Journal of Economic Perspectives 28.2 (2014): 3-28.

[5]. Baye, Michael R., and John Morgan. "Information gatekeepers and price discrimination on the internet." Economics Letters 76.1 (2002): 47-51.

For authors
Guide for authors Policies for authors Aims and scope Subscription Open access policy
For editors
Policies for editors Editorial board
For reviewers
Policies for reviewers Privacy policy

Cookies are used by this site.
Copyright © 2024 EWA Publishing, its licensors, and contributors. All rights reserved, including text and data mining, AI training, and similar technologies.