Quotation Pennerstorfer, Dieter, Schmidt-Dengler, Philipp, Schutz, Nicolas, Weiss, Christoph, Yontcheva, Biliana. 2013. Information and Price Dispersion: Evidence from Retail Gasoline.


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Abstract

We examine the relationship between information and price dispersion in the retail gasoline market. We first show that the clearinghouse models in the spirit Stahl (1989) generate an inverted-U relationship between information and price dispersion. Past empirical studies of this relationship have relied on (intertemporal) variation in internet usage and adoption to measure the number of consumers that have access to the clearinghouse. We construct a new measure of information based commuter data from Austria. Regular commuters can freely sample gasoline prices on their commuting route, giving us spatial variation in the share of informed consumers. We use detailed information on gas station level price to construct various measures of price dispersion. Our empirical estimates of the relationship are in line with the theoretical predictions.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Working/discussion paper, preprint
Language English
Title Information and Price Dispersion: Evidence from Retail Gasoline
Year 2013
URL http://kooperationen.zew.de/fileadmin/user_upload/Redaktion/Industrie%C3%B6konomischer_Ausschuss/2014/Paper/schmidt_dengler_14.pdf

Associations

People
Weiss, Christoph (Details)
Yontcheva, Biliana (Details)
External
Pennerstorfer, Dieter (WIFO, Austria)
Schmidt-Dengler, Philipp (Universit├Ąt Mannheim, Germany)
Schutz, Nicolas (Universit├Ąt Mannheim, Germany)
Organization
Institute for Economic Policy and Industrial Economics IN (Details)
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