| This dissertation consists of three essays that examine, both theoretically and empirically, online markets for price information.; Chapter 2 studies whether there are systematic differences in the airfares obtained through different online travel sites. Two data sets consisting of daily ticket price quotes collected from seven travel websites in 2002 are assembled and analyzed, showing that, after controlling for ticket availability and heterogeneities that affect ticket prices, there was little systematic difference in the average fares when ticket quotes were available at multiple online sites in 2002. This parity in average fares is in contrast to differences as large as 18% present in the 1997 data, and stems in part from the fact that airlines directly compete for online travel dollars in 2002 but did not in 1997.; Chapter 3 analyzes the timing and nature of daily price adjustments for 15 retail consumer electronics and computer products spanning the 2003--04 holiday shopping season. Using the same methodology as that of Warner and Barsky (1995), I find that prices tend to be higher during holidays but there is no systematic difference in prices between days of the week. I attribute these findings to an unpredictable demand pattern and negligible cost of online price search. Transition matrices and the multinomial logit model are used to measure, respectively, the frequency and the magnitude of daily price adjustments by online retailers. Econometric results suggest an average frequency of 13% in daily price change, and that prices are more likely to drop than to rise.; Chapter 4 presents a theoretical model of vertical integration between an information market and the product market it serves. I show that vertical integration between an information gatekeeper and one or more firms in the product market increases the profits of the vertically integrated gatekeeper as well as downstream firms in the product market. However, integration negatively impacts the downstream product market and social welfare; that is, equilibrium prices in the product market rise and overall social welfare declines. |
