Grey Power: An Empirical Investigation of the Impact of Parallel Imports on Market Prices

The persistence of price discrimination across international markets with falling costs of unofficial importing is both paradox and policy concern. E-commerce facilitates a “grey” market in parallel imports, particularly for high-value goods such as electronics. This paper explores the impact of unofficial imports on price using a panel of product markets mediated via an Internet shopbot. It finds the presence of an import model lowers prices across the market. However, unlike the refurbished model it is not simply an inferior substitute. The import price discount increases over the model life cycle, suggesting that model-specific preferences fall as each model ages.

Steve ThompsonEmail: