Price setting in online markets: Basic facts, international comparisons, and cross-border integration

Konferenzbeitrag

We document basic facts about prices in online markets in the U.S. and Canada, a rapidly growing segment of the retail sector. Relative to prices in regular stores, prices in online markets are more flexible as well as exhibit stronger pass-through (60-75 percent) and faster convergence (half-life less than 2 months) in response to movements of the nominal exchange rate. Multiple margins of adjustment (frequency of price changes, direction of price changes, size of price changes, exit of sellers) are active in the process of responding to nominal exchange rate shocks. Furthermore, we use the richness of our dataset to show that degree of competition, stickiness of prices, synchronization of price changes, reputation of sellers, and returns to search effort are important determinants of pass-through and speed of price adjustment for international price differentials.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2015: Ökonomische Entwicklung - Theorie und Politik - Session: Microdata on price setting ; No. G01-V1

Classification and Topics

• Classification: Wirtschaft ; Price Level; Inflation; Deflation ; Open Economy Macroeconomics ; Macroeconomic Aspects of International Trade and Finance: General

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Talavera, Oleksandr ; Gorodnichenko, Yuriy
• Event: Veröffentlichung
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/112885
• Last update: 10.03.2025, 11:44 AM CET