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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

More from the Author

    • March, 2021
    • American Economic Review: Insights

    Tariff Passthrough at the Border and at the Store: Evidence from U.S. Trade Policy

    By: Alberto Cavallo, Gita Gopinath, Brent Neiman and Jenny Tang
    • March 2021
    • Review of Economics and Statistics

    Targeted Price Controls on Supermarket Products

    By: Alberto Cavallo and Diego Aparicio
    • February 2021
    • Faculty Research

    The Coronavirus (COVID-19) Pandemic and the Global Economy (B)

    By: Alberto Cavallo and Christian Godwin
More from the Author
  • Tariff Passthrough at the Border and at the Store: Evidence from U.S. Trade Policy By: Alberto Cavallo, Gita Gopinath, Brent Neiman and Jenny Tang
  • Targeted Price Controls on Supermarket Products By: Alberto Cavallo and Diego Aparicio
  • The Coronavirus (COVID-19) Pandemic and the Global Economy (B) By: Alberto Cavallo and Christian Godwin
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