| Abstract
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Dispersion of prices of essentially homogeneous products has .fascinated economists for decades. Explanations for the phenomenoninclude lack of information on the part of consumers (Stigler, 1961;Rothschild, 1973; Salop and Stiglitz, 1977); absence of market power, orability to collude, on the part of producers (Means, 1935, 1939; Stigler andKindahl, 1 970; Carlton, 1986; Caucutt, Ghosh, and Kelton, 1999);uncertainty in pricing introduced by inflation or macroeconomic shocks(Vining and Elwertowski, 1976; Domberger, 1987; Van Hwmissen, 1988);and simple pricing independence of downstream resellers (Lafontaine,1995, 1999). Our research offers the first integrated empirical study ofprice dispersion in the sense of explicitly accounting for all but the fourthexplanation; we implicitly acknowledge the fourth. The theoreticalfoundation for our study is the Salop and Stiglitz two-price equilibrium in a....-....,....-...,..tested for theQ1 PC1 bus cardBoth these projects mere sofixare des elopment efforts tonards contributing to dlfferentaspects of Roboucs and lZ1echatronics projects m the Controls and Roboucs Group..
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