Price dispersion in the lab and on the Internet: theory and evidence

摘要: Price dispersion is ubiquitous in settings that closely approximate textbook Bertrand competition. We show only a little bounded rationality among sellers needed to rationalize such dispersion. A variety of statistical tests, based on datasets from two independent laboratory experiments and structural estimates the parameters our models, suggest bounded-rationality-based theories price organize data remarkably well. Evidence also presented models are consistent with leading Internet comparison site.