Starjournal Quotation Pennerstorfer, Dieter, Schmidt-Dengler, Philipp, Schutz, Nicolas, Weiss, Christoph, Yontcheva, Biliana. 2020. Information and Price Dispersion: Theory and Evidence. International Economic Review. 61 (2), 871-899.


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Abstract

Limited information is the key element generating price dispersion in models of homogeneous‐goods markets. We show that the global relationship between information and price dispersion is an inverse‐U shape. We test this mechanism for the retail gasoline market using a new measure of information based on commuter data from Austria. Commuters sample gasoline prices on their commuting route, providing us with spatial variation in the share of informed consumers. Our empirical estimates are in line with the theoretical predictions. We also quantify how information affects average prices paid and the distribution of surplus in the gasoline market.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal International Economic Review
Citation Index SSCI
WU Journalrating 2009 A+
Starjournal Y
Language English
Title Information and Price Dispersion: Theory and Evidence
Volume 61
Number 2
Year 2020
Page from 871
Page to 899
Reviewed? Y
URL https://onlinelibrary.wiley.com/doi/10.1111/iere.12443
DOI http://dx.doi.org/10.1111/iere.12443
Open Access N
JEL D43, D83, L13

Associations

People
Pennerstorfer, Dieter (Former researcher)
Weiss, Christoph (Details)
Yontcheva, Biliana (Details)
External
Schmidt-Dengler, Philipp (Uni Wien, Austria)
Schutz, Nicolas (Uni Mannheim, Germany)
Organization
Department of Economics (Weiss) (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
5300 Economics (Details)
5370 Industrial economics (Details)
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