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  • 2019
  • Article
  • Jackson Hole Economic Symposium Conference Proceedings (Federal Reserve Bank of Kansas City)

More Amazon Effects: Online Competition and Pricing Behaviors

By: Alberto Cavallo
  • Format:Print
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Abstract

I study how online competition, with its shrinking margins, algorithmic pricing technologies, and the transparency of the web, can change the pricing behavior of large retailers in the U.S. and affect aggregate inflation dynamics. In particular, I show that in the past ten years online competition has raised both the frequency of price changes and the degree of uniform pricing across locations. These changes make retail prices more sensitive to aggregate “nationwide” shocks, increasing the pass-through of both gas prices and nominal exchange rate fluctuations.

Keywords

Amazon; Online Prices; Inflation; Uniform Pricing; Price Stickiness; Monetary Economics; Economics; Macroeconomics; Inflation and Deflation; System Shocks; United States

Citation

Cavallo, Alberto. "More Amazon Effects: Online Competition and Pricing Behaviors." Jackson Hole Economic Symposium Conference Proceedings (Federal Reserve Bank of Kansas City) (2019).

Supplemental Information

Online Appendix
Appendix with additional results.
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About The Author

Alberto F. Cavallo

Business, Government and the International Economy
→More Publications

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    • 2023
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    Detecting Structural Breaks in Inflation Trends: A High-Frequency Approach

    By: Alberto Cavallo and Gaston Garcia Zavaleta
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    FIELD Immersion 2022: Albuquerque, New Mexico

    By: Alberto Cavallo and Stacy Straaberg
    • March 2022
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    International Macroeconomics with Global Crises

    By: Alberto Cavallo
More from the Author
  • Detecting Structural Breaks in Inflation Trends: A High-Frequency Approach By: Alberto Cavallo and Gaston Garcia Zavaleta
  • FIELD Immersion 2022: Albuquerque, New Mexico By: Alberto Cavallo and Stacy Straaberg
  • International Macroeconomics with Global Crises By: Alberto Cavallo
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