What Causes Price Differences in E-Commerce? (June 2002)

June, 2002


The causes for differing prices in e-commerce that last over long time periods provide important information regarding competition in these markets.  Just as few passengers on the same airline flight pay the same fare, online buyers often pay significantly differing amounts for the same merchandise.   Studies of persistent price differences between Internet merchants and prices that different buyers are willing to pay offer insights into how websites should be designed, what products should be sold online, and the importance of being recognized as a trusted seller.