The elements influencing the online price dispersion on Iranian electronic retailers

Abstract

Frictionless electronic commerce is a made-up story and online price dispersion is high and steady. There is not enough proof that online prices are decreasing and becoming alike. Although the studies show that prices dispersion on the Internet is decreased, they are steady yet. Therefore, this study aims to determine the important dimensions of electronic retailers' heterogeneity and examine the markets elements that influence price dispersion. The rapid development of e-commerce in Iran has made this task feasible. Questionnaire and observation were the methods used for collecting the data in this study. 106 identical products from 56 electronic retailers and 948 price quotes in different products categories such as books, CDs, laptops, mobiles, monitors, MP3s and digital cameras in online market have been used as data. 140 questionnaires have been developed for evaluating electronic retailers' characteristics. The method used in this analysis is statistical which mostly were factor analysis, cluster and regression analyses. It has been proved that services provided by electronic retailers could be described by five basic factors. Also, the results revealed that market and electronic retailers' characteristics are the main explanatory variables of price dispersion among electronic retailers.