Do Mature Online Markets Reduce Price Differences?

November, 2003


Because of numerous competitive e-commerce sites selling the same categories of merchandise, one would think that prices for these items should become more similar as time passes. Instead, as online markets mature, these prices are diverging. Knowing the drivers for these price divergences will better prepare electronic merchants to compete in cyberspace and guide them in setting their prices at levels consistent with the characteristics of their sites.