Economics, Econometrics and Finance
4 years ago

Online book prices remain rigid across borders, hindering international trade.

RePEc: Research Papers in Economics
Virtual Borders: Online Nominal Rigidities and International Market Segmentation
Jean Boivin, Robert Clark, Nicolas Vincent

Paper Summary

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The article explores how online book prices are affected by international borders and exchange rate fluctuations. The researchers analyzed data from US and Canadian retailers and found that prices are sticky, vary between retailers, and show high dispersion. Prices do not change much with exchange rate fluctuations, suggesting market segmentation plays a role.