Quotation Pennerstorfer, Dieter, Schmidt-Dengler, Philipp, Schutz, Nicolas, Weiss, Christoph, Yontcheva, Biliana. 2015. Information and Price Dispersion: Theory and Evidence. WIFO Working Paper, No 502.


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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 of Stahl (1989) generate an inverted-U relationship between information and price dispersion. We construct a new measure of information based on precise commuter data from Austria. Regular commuters can freely sample gasoline prices on their commuting route, providing us with 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: Theory and Evidence
Title of whole publication WIFO Working Paper, No 502
Year 2015
URL http://www.wifo.ac.at/jart/prj3/wifo/resources/person_dokument/person_dokument.jart?publikationsid=58341&mime_type=application/pdf

Associations

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