ICEF/LFE Research Seminar
Speaker: Olexander Talavera (University of Sheffield)
On Thursday, October 24 at 4.40pm International College of Economics and Finance and International Laboratory of Financial Economics held a research seminar in Finance.Speaker: Olexander Talavera (University of Sheffield)
Theme: «Price settings in online markets: Basic facts, international comparisons, and cross-border integration» joint work with Yuriy Gorodnichenko
Venue: Shabolovka st., 26, room 3211
Abstract: This paper documents basic facts about prices in online markets in the U.S. and Canada which is a rapidly growing segment of the retail sector. While less rigid than prices in brick-and-mortar stores, online price exhibit significant stickiness (price spells can be as high as one month of average) and significant dispersion of prices even for identical goods within and across countries. The paper shows that for online markets price differentials across countries are adjusted faster (half-life of about 2-2.5 months) and the pass-through of nominal exchange rate is similar (≈30%) when compared to the corresponding counterparts of goods sold in regular stores. Degree of competition, stickiness of prices, synchronization of price changes, reputation of sellers, and returns to search effort are important determinants of pass-through and speed of price adjustment for international price differentials .