Dirk Bergemann, Alessandro Bonatti, 11 October 2018

The growth of social media over the past decade has brought a parallel explosion in the size and value of information markets. This column presents the findings from a comprehensive model of data trading and brokerage. The model identifies three aspects of information markets – the value of information, the nature of competition in these markets, and consumers’ incentives – which are in particular need of further research and understanding. 

Christian Helmers, Pramila Krishnan, Manasa Patnam, 25 January 2016

The growth of e-commerce has seen an enormous increase in the choice of products available online. With recent evidence from psychology suggesting that too much choice can impede decision making, this column examines whether consumers’ online choices are consistent with models of limited attention. High-frequency, transaction-level data from an online retail store reveal that consumers are influenced by recommendations. This suggests consumers do indeed have limited attention and simplify decision making by focusing on a subset of available products.

Christopher Stanton, Catherine Thomas, 03 November 2015

Outsourcing labour tasks to lower wage countries has been made much easier by the emergence of global online labour markets. This column argues that there are significant frictions in these markets, making it difficult for workers to get their first job and establish a reputation. However, new types of organisations have emerged that allow the sharing of reputations among groups of high-quality workers. These organisations seem to rely on offline social ties between workers to help reduce information-related trade barriers.

Yuriy Gorodnichenko, Oleksandr Talavera, Slavik Sheremirov, 21 January 2015

An increasing share of purchases are made online where price changes are very cheap. This column presents new evidence on price dispersions and frictions using novel data from an online shopping platform from the US and the UK. Online prices are more flexible than prices in conventional stores but still sticky. Prices of goods sold online could be as imperfect as in regular markets. 

Yuriy Gorodnichenko, Oleksandr Talavera, 15 September 2014

Online markets have unusual characteristics that allow testing whether the law of one price holds. This column uses a unique dataset to demonstrate that the frictions in the price adjustments in online markets are indeed lower. The authors find that in online markets the price change is smaller, the duration of price spell – shorter, the pass-through is larger, and speed of price adjustment – faster. In the future, we can expect smaller price differentials, bringing the law of one price closer to reality.

Jennifer Doleac, Luke Stein, 29 June 2010

Do buyers discriminate based on race? This column describes an experiment in the US that advertised iPods online from black and white sellers. Black sellers received fewer offers at lower prices, doing better in markets with competition amongst buyers and worse in high-crime markets. The authors find evidence of both statistical and taste-based discrimination.


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