We examine the pricing trends in the online toy markets by using panel data regression models with error
components and serial correlation. Our results indicate that both online branch of multi-channel retailers
(OBMCRS) and dotcoms charge similar prices on average, and that over time their prices move in
tandem. Although the OBMCR retailers charge significantly different prices, the dotcom do charge
similar prices. Moreover, both retailer types demonstrate different magnitudes of price dispersion that
move at different rates over time. Although the price dispersion of OBMCRS is higher than that of the
dotcoms at the beginning, the gap narrows over time.