frictionless commerce a comparison of internet and conventional retailers there have been many claims that the internet represents a new nearly frictionless market our research empirically analyzes the characteristics of the internet as a channel for two categories of homogeneous products books and cds using a data set of over 8 500 price observations collected over a period of 15 months we compare pricing behavior at 41 internet and conventional retail outlets we find that prices on the internet are 9 16 lower than prices in conventional outlets depending on whether taxes shipping and shopping costs are included in the price additionally we find that internet retailers price adjustments over time are up to 100 times smaller than conventional retailers price adjustments presumably reflecting lower menu costs in internet channels we also find that levels of price dispersion depend importantly on the measures employed when we compare the prices posted by different internet retailers we find substantial dispersion internet retailer prices differ by an average of 33 for books and 25 for cds however when we weight these prices by proxies for market share we find dispersion is lower in internet channels than in conventional channels reflecting the dominance of certain heavily branded retailers we conclude that while there is lower friction in many dimensions of internet competition branding awareness and trust remain important sources of heterogeneity among internet retailers

hearing the voices of the poor assigning poverty lines on the basis of local perceptions of poverty a quantitative analysis of qualitative data from participatory wealth ranking in rural south africa summary we applied a mixed methods approach to participatory wealth ranking pwr to identify the number of poor households in eight villages of rural south africa and describe how poor they are we generated a household wealth index on the basis of the ranking process and statements made on standard of living descriptions from pwr identified households as very poor poor but a bit better off or doing ok of 9 671 households 3 113 32 2 could be considered very poor or poor the paper presents a novel approach to wealth ranking that generates a rich appraisal of poverty

discrete equilibrium price dispersion an explicit solution of an equilibrium model with price setting firms and searching customers makes possible a number of comparativestatics predictions about how cost differences among firms search costs of customers and taxes will affect the mean and variance of the distribution of market prices another implication of the model is that a firm s demand depends on the difference between its price and the average price in the market

using price distributions to estimate search costs we show how the equilibrium restrictions implied by standard search models can be used to estimate search cost distributions using price data alone we consider both sequential and nonsequential search strategies and develop estimation methodologies that exploit equilibrium restrictions to recover estimates of search cost heterogeneity that are theoretically consistent with the search models we illustrate the method using online prices for several economics and statistics textbooks

how valuable is a good reputation a sample selection model of internet auctions on the online auction site ebay by convention sellers do not ship goods to winning bidders until after they have received payment so there is an opportunity for sellers to take advantage of bidders trust realizing this the designers of ebay created a system that relies on self enforcement using reputation several recent studies have found that bidders give little or no reward to sellers who have better reputations i show that in fact sellers are strongly rewarded for the first few reports that they have behaved honestly but marginal returns to additional reports are severely decreasing

testing models of consumer search using data on web browsing and purchasing behavior using a large data set on web browsing and purchasing behavior we test to what extent consumers are searching in accordance to various classical search models we nd that the benchmark model of sequential search with a known distributions of prices can be rejected based on the recall patterns we observe in the data moreover we show that even if consumers are initially unaware of the price distribution and have to learn the price distribution observed search behavior for given consumers over time is more consistent with non sequential search than sequential search with learning our

economic insights from internet auctions this paper surveys recent studies of internet auctions four main areas of research are summarized first we survey several studies that document and attempt to explain the frequently observed sniping or last second bidding behavior in these auctions second we summarize several methods proposed to quantify the distortions caused by asymmetric information in these markets most notably due to the winner s curse third we explore research about the role of reputation mechanisms installed to help combat these distortions finally we discuss what internet auctions have to teach us about auction design

price dispersion in the small and in the large evidence from an internet price comparison site this paper examines four million daily price observations for more than 1 000 consumer electronics products on the price comparison site http shopper com we find little support for the notion that prices on the internet are converging to the law of one price in addition observed levels of price dispersion vary systematically with the number of firms listing prices the difference between the two lowest prices the gap averages 23 per cent when two firms list prices and falls to 3 5 per cent in markets where 17 firms list prices these empirical results are an implication of a general clearinghouse model of equilibrium price dispersion

risk response in the beef marketing channel a multivariate generalized arch m approach a model of the farm retail price spread for beef is specified under rational expectations in which systematic risk response on the part of marketing intermediaries is allowed the three equation structural model contains potentially time varying risk terms in margin and supply equations which i approximate and estimate using a multivariate garch in mean approach the estimated model is used to infer relative risk premia in beef margins and to simulate short run equilibrium risk effects results indicate that price risk has at times had substantial impacts on farm and retail beef prices and production

socioeconomic stratification by wealth ranking is it valid abstract this paper validates a rapid rural appraisal wealth ranking technique using standard socioeconomic indicators from a household survey in rural bangladesh key informants stratified 1 637 households into three wealth groups according to a number of broad criteria and a questionnaire was subsequently administered to each household health demographic and economic variables derived from the questionnaire were found to differ significantly according to wealth group analysis supports the construct validity and empirical validity of the wealth ranking technique as a means of stratifying households by socioeconomic status the requirements for external validity as assessed through the comparison of findings with similar studies elsewhere in south asia are also satisfied

an efficient dynamic auction for heterogeneous commodities this paper proposes a new dynamic design for auctioning multiple heterogeneous commodities generalizing earlier work that treated identical objects an auctioneer wishes to allocate one or more units of each of k heterogeneous commodities to n bidders the auctioneer announces a vector of current prices bidders report back quantities demanded at these prices and the auctioneer adjusts the prices units are credited to bidders at the current prices as their opponents demands decline and the process continues until every commodity market clears bidders rather than being required to behave as price takers are permitted to strategically exercise their market power nevertheless with pure private values the proposed auction yields walrasian equilibrium prices an efficient outcome results as from a vickrey clarke groves mechanism but bidders are only required to evaluate their demands along a one dimensional path of prices rather than reporting their utilities over the entire k dimensional consumption set the auction is also more transparent and potentially simpler for bidders to understand and has the advantage of assuring the privacy of the upper portions of bidders demands theoretically the new auction provides a new foundation for convergence to walrasian equilibrium in an exchange economy practically it provides an efficient method for simultaneously auctioning two or more related types of securities for example three month and six month treasury bills it is also potentially useful for auctioning multiple types of communications spectrum for example licenses for paired and unpaired spectrum

gender poverty and deprivation evidence from the republic of guinea the article examines the relationship between gender and consumption poverty and between gender and deprivation in the republic of guinea national household survey data reveal that women are not more likely than men to be consumption poor or to suffer greater consumption poverty participatory poverty assessment data from the village of kamatiguia reveal that women are worse off than men when deprivation includes inter alia excessive work load and reduced decision making authority when consumption poverty poorly correlates with other dimensions of deprivation it should not be the sole guide for equity based policy intervention

rationalizable outcomes of large private value first price discrete auctions abstract we consider discrete versions of first price auctions we present a condition on beliefs about players values such that with any fixed finite set of possible bids and sufficiently many players only bidding the bid closest from below to one s true value survives iterative deletion of bids that are dominated where the dominance is evaluated using beliefs that satisfy the condition the condition holds in an asymmetric conditionally independent environment so long as the likelihood of each type is bounded from below in particular with many players common knowledge of rationality and that all types are possible in an independent and private values auction implies that players will bid just below their true value

number of sellers average prices and price dispersion abstract a variety of models provide differing predictions regarding the effect of an increase in the number of competitors in a market seller density on prices and price dispersion we review different approaches to generating equilibrium price dispersion and then empirically estimate the relationship between seller density average product price and price dispersion in the retail gasoline industry using four unique gasoline price data sets controlling for station level characteristics we find that an increase in station density consistently decreases both price levels and price dispersion across four geographical areas

mechanism design by competing sellers a dynamic model with many sellers and buyers is constructed agents failing to trade may trade in the next period an equilibrium is found where sellers hold identical auctions and buyers randomize over the sellers they visit the distribution of buyer valuations is endogenous an auction with efficient reserve is an optimal mechanism from each seller s point of view in spite of the ability of any seller to alter the distribution of buyer types participating in the seller s mechanism by altering the mechanism copyright 1993 by the econometric society

oligopolistic pricing with sequential consumer search n identical stores compete by choosing prices for a homogeneous good with constant marginal costs consumers search sequentially with perfect recall for the lowest price one class of consumers called shoppers have zero search costs while all other consumers have a positive search cost c there is a unique symmetric nash equilibrium price distribution with the property that it changes smoothly from marginal cost pricing when all consumers are shoppers and or c 0 and monopoly pricing when no consumers are shoppers remarkably as the number of stores increases the nash equilibrium becomes more monopolistic copyright 1989 by american economic association

internet auctions with many traders abstract we study a multi unit auction environment similar to ebay sellers each with a single unit of a homogeneous good set reserve prices at their own second price auctions each buyer has private value for the good and wishes to acquire a single unit buyers can bid as often as they like and move between auctions we characterize a perfect bayesian equilibrium for this decentralized dynamic mechanism in which conditional on reserve prices an efficient set of trades occurs at a uniform price in a large but finite market the sellers set reserve prices equal to their true costs under a very mild distributional assumption so ex post efficiency is achieved buyers strategies in this equilibrium are simple and do not depend on their beliefs about other buyers valuations or the number of buyers and sellers

ebay s crowded evenings competition neglect in market entry decisions do firms neglect competition when making entry decisions this paper addresses this question analyzing the time of day at which ebay sellers set their auctions to end consistent with competition neglect it is found that i a disproportionate share of auctions end during peak bidding hours ii such hours exhibit lower selling rates and prices and iii peak listing is more prevalent among sellers likely to have chosen ending time strategically suggesting disproportionate entry is a mistake driven by bounded rationality rather than mindlessness the results highlight the importance for marketing researchers of assessing rather than assuming the rationality of firm behavior

semi nonparametric estimation of consumer search costs this paper studies the estimation of the distribution of non sequential search costs we show that the search cost distribution is identified by combining data from multiple markets with common search technology but varying consumer valuations firms costs and numbers of competitors to exploit such data optimally we provide a new method based on semi nonparametric estimation we apply our method to a dataset of online prices for memory chips and find that the search cost density is essentially bimodal such that a large fraction of consumers searches very little whereas a smaller fraction searches a relatively large number of stores copyright c 2012 john wiley sons ltd

bidding behavior in competing auctions evidence from ebay much of the existing auction literature treats auctions as running independently of one another with each bidder choosing to participate in only one auction however in many online auctions a number of substitutable goods are auctioned concurrently and bidders can bid on several auctions at the same time recent theoretical research shows how bidders can gain from the existence of competing auctions the current paper providing the first empirical evidence in support of competing auctions theory using online auctions data from ebay our results indicate that a significant proportion of bidders do bid across competing auctions and that bidders tend to submit bids on auctions with the lowest standing bid as the theory predicts the paper also shows that winning bidders who cross bid pay lower prices on average than winning bidders who do not

competitive promotional strategies this article analyzes the equilibrium pricing strategies of brands engaged in a pricing game each brand has a monopoly market loyal consumers and competes with others in a common market called brand switchers in the case of a duopoly it is shown that the behavior of the brand switchers characterizes the equilibrium behavior of the duopolists this article focuses on two key comparative statics namely the depth of discounts away from a regular high price and the probability of giving a deal or the frequency of deals how these properties vary with the size of the loyal markets and the behavior of the brand switching population is discussed copyright 1988 by the university of chicago

price dispersion and competition with differentiated sellers i measure price dispersion among differentiated retail gasoline sellers and study the relationship between dispersion and the local competitive environment significant price dispersion exists even after controlling for differences in station characteristics and price differences between sellers change frequently the extent of price dispersion is related to the density of local competition but this relationship varies significantly depending on the type of seller and the composition of its competitors these findings are consistent with interactions between seller and consumer heterogeneity that are not well understood in the existing price dispersion literature

equilibrium price dispersion in retail markets for prescription drugs this study seeks to establish the empirical importance of price dispersion due to costly consumer search by examining retail prices for prescription drugs posted prices in two geographically distinct markets are shown to vary considerably across pharmacies within the same market even after one controls for variation due to pharmacy differences pharmacy heterogeneity accounts for at most one third of the observed price dispersion the empirical analysis hinges on the observation that consumers incentives to price shop depend on characteristics of the drug therapy cross sectional patterns in price distributions across drugs are consistent with the predictions of a search model prices for repeatedly purchased prescriptions for which the expected benefits of search are highest exhibit significant reductions in both dispersion and price cost margins

traditional wealth modern goods and demographic behavior in rural senegal summary the study investigates the relationships of demographic indicators fertility mortality marriage education with modern and traditional wealth in rural senegal data were based on rural households interviewed in the 2011 dhs survey an absolute wealth index was computed from a list of 15 modern goods a traditional wealth index was computed from data on land and livestock per capita modern wealth was always associated with modern demographic behavior lower fertility lower mortality higher age at marriage higher level of education whereas traditional wealth was not associated with fertility and mortality and was negatively associated with marriage and education

competition among sellers who offer auctions instead of prices abstract in this paper we study a large market in which sellers compete by offering auctions to buyers instead of simple fixed price contracts two variants of the model are studied one extends a model first analyzed by wolinsky rev econ stud 55 1988 71 84 in which buyers learn their valuations only after meeting sellers the other variant extends the model of mcafee econometrica61 1993 1281 1312 in which buyers know their valuations before they choose among available auctions the equilibrium array of auctions is characterized for each case and the efficiency properties of the equilibria are analyzed journal of economic literatureclassification numbers d41 d44 d82

the bidder s curse comment the prices of auctions on ebay often exceed ebay s fixed price buyit now prices i investigate the causes of this overbidding focusing on the interpretation in malmendier and lee 2011 that the observed overbidding cannot be explained without allowing for nonstandard preferences or beliefs and that the strongest direct evidence points to limited attention using data from their study and new data from ebay i provide evidence that a key condition for identifying nonstandard behavior may not have been met and that the observed overbidding is not inconsistent with standard behavior once we allow for the likely presence of search costs jel d12 d44 d83 the large literature on price dispersion has identified search costs as a primary explanation for the ubiquitous failure of the law of one price while many expected the internet to reduce search costs and consequently price dispersion empirical work has found that price dispersion continues to be widespread even as commerce has shifted online see baye morgan and scholten 2006 for a survey of the literature adding to this evidence malmendier and lee 2011 henceforth ml found that auction ending prices on ebay often exceed ebay s fixed price buy it now bin prices ml examined 167 auctions for the cashflow 101 board game and 1 931 auctions for a cross section of products such as books and consumer electronics in 42 percent of the cashflow 101 auctions the ending price exceeded the lowest contemporaneous bin price and the mean auction ending price was 0 28 above the mean low bin price showing generalizability the authors reported that in 48 percent of the cross section auctions the ending price exceeded the low bin price and the mean net overpayment was 10 percent 1

dynamic markets with competitive bidding the model features a dynamic market in steady state in which prices are determined in first price auctions it combines competition over time familiar from the pairwise meeting models with instantaneous bidding competition it inquires how different properties of the model determine the relative importance of these two aspects of the competition and in particular how the non market clearing price result of the matching and bargaining models is affected by the

search costs and equilibrium price dispersion in auction markets abstract a leading explanation for price dispersion in posted price markets is search costs we incorporate this insight into a model of competing second price auctions similar to ebay by doing so we extend the narrow literature on competing auctions to capture price dispersion and grow the already large literature on price dispersion to include auctions we provide evidence on search costs and price dispersion using data collected from ebay identifying search costs by exploiting a discontinuity in the visibility of auctions due to ebay s search tool

identification of standard auction models this paper presents new identification results for models of first price second price ascending english and descending dutch auctions we consider a general specification of the latent demand and information structure nesting both private values and common values models and allowing correlated types as well as ex ante asymmetry we address identification of a series of nested models and derive testable restrictions enabling discrimination between models on the basis of observed data the simplest model symmetric independent private values is nonparametrically identified even if only the transaction price from each auction is observed for richer models identification and testable restrictions may be obtained when additional information of one or more of the following types is available i the identity of the winning bidder or other bidders ii one or more bids in addition to the transaction price iii exogenous variation in the number of bidders iv bidder specific covariates while many private values pv models are nonparametrically identified and testable with commonly available data identification of common values cv models requires stringent assumptions nonetheless the pv model can be tested against the cv alternative even when neither model is identified

ten years of q squared implications for understanding and explaining poverty summary over the past decade there have been a number of initiatives to promote a more systematic integration of quantitative and qualitative or q squared approaches to poverty analysis in the global south and a large body of literature had emerged the objective of the article is to present a selective review of this empirical work with a view to demonstrate the value it has added for understanding and explaining poverty the evidence strongly suggests that q squared approaches have aided our understanding of the characteristics of the poor and the causes of poverty

search and choice in online consumer auctions price dispersion in simultaneous online auctions is a puzzle in light of the relatively low search costs required to find the lower price much of this price dispersion appears to be due to a lack of switching by bidders between auctions which in turn could be due to inertia related to search costs we identify some of the influencing factors through a controlled field experiment involving pairs of simultaneous auctions keeping the sellers and the goods sold identical between two auctions we vary auction design features between and within pairs including shipping cost open reserve secret reserve price and duration and we provide bidders with incentives to search we use a choice model that examines individual choice between pairs of simultaneous auctions we find that within pair price dispersion is substantial and that prices and auction choice by bidders are indeed related to search costs we find strong inertia in auction choice and find that this effect significantly interacts with time left in the auction although individuals do not always choose a lower priced auction they are more likely to do so when search costs are low or search incentives are high

bertrand competition when rivals costs are unknown the conclusions of the bertrand model of competition are substantially altered by the presence of asymmetric information about rivals costs asymmetric information eliminates the discontinuity in the bertrand model and significantly alters the properties of the market equilibrium in the bertrand nash equilibrium when rivals costs are unknown firms price above marginal cost and have positive expected profit the analysis is extended to franchise competition the market equilibrium is sensitive to market structure and yields incentives for entry copyright 1995 by blackwell publishing ltd

involving communities in the targeting of cash transfer programs for vulnerable children opportunities and challenges we used baseline data collected in july september 2009 from a randomized controlled trial of a cash transfer program for vulnerable children in eastern zimbabwe to investigate the effectiveness coverage and efficiency of census and community based targeting methods for reaching vulnerable children focus group discussions and in depth interviews with beneficiaries and other stakeholders were used to explore community perspectives on targeting community members reported that their participation improved ownership and reduced conflict and jealousy however all the methods failed to target a large proportion of vulnerable children and there was poor agreement between the community and census based methods

information gatekeepers on the internet and the competitiveness of homogeneous product markets we examine the equilibrium interaction between a market for price information controlled by a gatekeeper and the homogenous product market it serves the gatekeeper charges fees to firms that advertise prices on its internet site and to consumers who access the list of advertised prices gatekeeper profits are maximized in an equilibrium where a the product market exhibits price dispersion b access fees are sufficiently low that all consumers subscribe c advertising fees exceed socially optimal levels thus inducing partial firm participation and d advertised prices are below unadvertised prices introducing the market for information has ambiguous social welfare effects