Date of Defense

4-24-2026

Date of Graduation

6-2026

Department

Finance and Commercial Law

First Advisor

Wenling Lu

Second Advisor

Beth Ernst

Abstract

This study investigates the phenomenon of price dispersion in online retail markets during high-demand periods, focusing on the role of dynamic pricing under conditions of demand uncertainty. Although online markets operate in a transparent way, and consumers find it cheap to search them, the price dispersion phenomenon, when the same product is sold at varying prices by various vendors, persists. The study discusses the case of higher dispersion of prices in high-demand times like holidays, sales events, or shortages of goods when there is uncertainty about the future demand, causing dynamic pricing models. In analyzing the price of 25 the same products over four big sites (Amazon, Walmart, Target, and Instacart), the analysis follows a 4-week time span, which contrasts between average-demand and peak-demand seasons. Our results show that the price dispersion tends to increase strongly in high-demand times, patients experience bigger price distributions, and more frequently change prices across platforms. The findings underscore the fact that dynamic pricing, which is motivated by the uncertainty about demand and urgency, amplifies price fluctuation, especially of goods with high urgency or seasonal demand. These results indicate that, even though online markets provide transparency in prices, it does not mean that all prices are equal because sellers are more involved in changing prices to respond to changes in demand. The research will help in the comprehension of the reasons behind price dispersion in online marketplaces and how this will implicate consumers who experience a stronger price during peak times, and retailers who need to juggle dynamic pricing policies and consumer loyalty.

Access Setting

Honors Thesis-Open Access

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