NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Ramayya Krishnan

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NBER Working Papers and Publications

December 2001Prices and Price Dispersion on the Web: Evidence from the Online Book Industry
with Karen Clay, Eric Wolff
in E-commerce, Severin Borenstein and Garth Saloner, editors
May 2001Prices and Price Dispersion on the Web: Evidence from the Online Book Industry
with Karen Clay, Eric Wolff: w8271
Using data collected between August 1999 and January 2000 covering 399 books, including New York Times bestsellers, computer bestsellers, and random books, we examine pricing by thirty-two online bookstores. One common prediction is that the reduction in search costs on the Internet relative to the physical channel would cause both price and price dispersion to fall. Over the sample period, we find no change in either price or price dispersion. Another prediction of the search literature is that the prices and price dispersion of advertised items or items that are purchased repeatedly will be lower than for unadvertised or infrequently purchased items. Prices across categories of books appear to conform to this prediction, with New York Times bestsellers having the lowest prices as a fract...

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