Reflections on Pricing Fuzziness:
Implications for Companies and Customers


Speaker:

Frédéric Jallat, PhD, Professor, ESCP Europe, KPMG Chair Research Associate

 

Frédéric is currently Professor, Academic Director of the graduate programme in Pharmaceutical & Bio-Techs Management, and a KPMG Chair Research Associate at the European School of Management (ESCP Europe) in Paris, France.

He has been a visiting faculty member and a visiting professor in five continents at over twenty universities including Bocconi University, New York University, Stanford University, The University of Texas at Austin, Thammasat University and the Foreign Trade Academy of Russia.

His research, teaching, and consulting activities mainly focus on four different topics: Pricing, Services Marketing and Management, Customer Relationship Management, and Breakthrough Strategies.

He received his Master degree from the University Panthéon-Sorbonne, France and a PhD degree in Management Sciences and Business Administration from University Aix-Marseille III and ESSEC, France.

Early research in the decade has predicted that online price dispersion should decline over time and that markets should converge. According to the “law of one price”, the Internet promised a new age of perfectly competitive markets and a more transparent information access for consumers.

Our dynamic study compares price dispersion in two major European countries (France and Italy) in different time settings. This study shows that in spite of some of the hypothesized deflating effects of a potential online “frictionless capitalism” and the supposed Euro (€) convergence effect, online price dispersion is not only persistent but even increases over time. Those results are partly counter-intuitive and potentially thought provoking for marketing experts, questioning the reliability of previous explanations and choice of potential deflating drivers. Therefore, we offer additional explanations of online price dispersion, highlighting other possible phenomena, and thus generating areas for further research and managerial applications.


Attendees will learn:

  • Why online price dispersion and price instability have increased over time
  • Why traditional models may focus on insufficiently comprehensive explanations
  • That possible explanations of the growth of price dispersion over time can be found in the combination of macro, meso and micro-economic factors

 

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