We study and contrast pricing and price evolution of online only (Dotcom) and
online branch of multi-channel retailers (OBMCRs) based on two panel data sets collected
from online toy markets. Panel data regression analyses reveal several interesting empirical
results: over time, OBMCRs and Dotcoms charge similar prices on average but Dotcoms
significantly increase their shipping costs that eventually drive the overall average price of
Dotcoms higher than that of OBMCRs. Price dispersions of both types of retailers are
persistent. The price dispersion of OBMCRs is higher than that of Dotcoms at the beginning
and does not change much over time, but the price dispersion of Dotcoms increases
significantly over time, indicating that the latter will eventually be higher than the former.
Moreover, the OBMCRs charge significantly different prices, but the Dotcoms charge similar
prices.