This paper aims at providing an explanation of the observed espresso price dispersion across major Italian cities. The empirical evidence suggests a positive relationships between the average espresso price in a city and the number of coffee shops (normalized for the adult population) operating...

In product markets, there exists substantial dispersion in prices for transactions of physically identical goods, and incumbent sellers sell at higher prices than entrants. This study develops a theory of dynamic pricing that explains these facts as results from the same fundamental friction:...

Until recently, Internet was considered as technology that will make the trade in goods frictionless. Online retailers' margins were to fall to zero and prices - according to theory of economics - were to equalize as a result of buyers comparing prices more easily (e.g. using shop bots)....