Citation

Discussion Paper Details

Please find the details for DP10771 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Information and Price Dispersion: Theory and Evidence

Author(s): Dieter Pennerstorfer, Philipp Schmidt-Dengler, Nicolas Schutz, Christoph Weiss and Biliana Yontcheva

Publication Date: August 2015

Keyword(s): commuter data, price dispersion, retail gasoline and search

Programme Area(s): Industrial Organization

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 prices to construct price dispersion measures. Our empirical estimates of the relationship are in line with the theoretical predictions.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=10771

Bibliographic Reference

Pennerstorfer, D, Schmidt-Dengler, P, Schutz, N, Weiss, C and Yontcheva, B. 2015. 'Information and Price Dispersion: Theory and Evidence'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=10771