Speaker Detail

Philipp Schmidt-Dengler photo

Philipp Schmidt-Dengler

Professor at the University of Vienna

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Related Sessions

Session Name Date Time
Information and Price Dispersion: Theory and Evidence 06 NOV 2015 09:50am - 10:25am

Abstract

We examine the relationship between information and price dispersion in the retail gasoline market. We first show that the clearinghouse models in the spirit of Stahl (1989) generate an inverted-U relationship between information and price dispersion.
We construct a new measure of information based on precise commuter data from Austria.
Regular commuters can freely sample gasoline prices on their commuting route, providing us with spatial variation in the share of informed consumers.
We use detailed information on gas station level prices to construct price dispersion measures.
Our empirical estimates of the relationship are in line with the theoretical predictions.