Some studies show that Internet markets are more efficient than conventional markets with respect to price levels, menu costs, and price elasticity, except substantial and persistent dispersion in prices on the Internet. Is price dispersion in Internet markets higher than that of conventional markets? This paper examines the nature of price competition in books among five online book-sellers in China, i.e. dangdang.com, joyo.com, bjbb.com, china-pub.com and welan.com. Unlike the researches before, we not only consider the products’ prices, but also the whole price level. According to the investigations and analyses of 50 books price observations collected in August 2004, we conclude that the whole price dispersion in Internet markets is not higher than conventional markets, and high price dispersion on one sample is the results of firm’s discrimination strategy. When the competition is very complete, the prices show a tendency to be consistent.
Ge, Zhiyuan and Shao, Yong, "Analysis of Price Dispersion in E-Market: A Case Study" (2004). ICEB 2004 Proceedings. 238.