Price Stickiness in the US and Europe Revisited: Evidence from Internet Prices*

Abstract

This paper compares price stickiness on the Internet and in traditional brick-and-mortar stores and examines differences across five countries: France, Germany, Italy, the UK and the US. Contrary to conventional retail prices, we find that Internet prices change less often in the US than in EU countries. However, this does not hold for all product categories. Second, prices on the Internet are not necessarily more flexible than prices in brick-andmortar stores. Third, our dataset reveals substantial heterogeneity in the frequency of price changes across Internet shops. Finally, panel logit estimates suggest that the likelihood of observing a price change is a function of both state-dependent and time-dependent factors.

Are Online and Offline Prices Similar? Evidence from Large Multi-Channel Retailers

“…A separate branch of the literature uses online prices from "shopbots," or price comparison websites, which are easier to collect. Examples include Brynjolfsson and Smith (2001) ;Brynjolfsson, Dick, and Smith (2009) ;Ellison and Ellison (2009a, b); Lunnemann and Wintr (2011);Gorodnichenko, Sheremirov, and Talavera (2014);and Gorodnichenko and Talavera (2017). Although these papers do not directly compare prices with offline data, their results suggest that online prices change more frequently and with smaller sizes than comparable findings in papers with offline CPI prices.…”

Scraped Data and Sticky Prices

“…My work is also related to papers that use online prices, such as Brynjolfsson, Dick, and Smith (2009), Ellison and Ellison (2009), Lunnemann and Wintr (2011), Gorodnichenko, Sheremirov, and Talavera (2014, Ellison et al (2015), and Gorodnichenko and Talavera (2017). These papers find that online prices tend to be more flexible and have smaller price changes than offline prices.…”

Tracking and Modelling Prices Using Web-Scraped Price Microdata: Towards Automated Daily Consumer Price Index Forecasting

“…This thresholding strategy represents an initial attempt to mitigate the destabilizing effect of large price jumps that are commonly attributable to product discounting, which may be seen as a specific form of price friction. Discussion of observational evidence for different types of on‐line price friction (or jumpiness) can be found in Lünnemann and Wintr (). We expect that more sophisticated treatments of price friction or jumpiness will eventually lead to improved inflation estimates.…”