Cardiff University | Prifysgol Caerdydd ORCA
Online Research @ Cardiff 
WelshClear Cookie - decide language by browser settings

Risk aversion, exchange-rate uncertainty, and the law of one price: insights from the market for online air-travel tickets

Arghyrou, Michael Georgiou, Gregoriou, Andros and Pourpourides, Panayiotis 2011. Risk aversion, exchange-rate uncertainty, and the law of one price: insights from the market for online air-travel tickets. Canadian Journal of Economics/Revue canadienne d'économique 44 (3) , pp. 880-906. 10.1111/j.1540-5982.2011.01659.x

Full text not available from this repository.

Abstract

We argue that risk aversion driven by exchange-rate uncertainty causes a wedge between the domestic and foreign prices of a homogeneous good. We test our hypothesis using a unique micro-data set from a market with minimum imperfections. The empirical findings validate our hypothesis, as accounting for exchange-rate uncertainty we are able to explain a significant proportion of deviations from the law of one price. Overall, our analysis suggests the possibility of a new solution to the purchasing power parity puzzles.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: B Philosophy. Psychology. Religion > BF Psychology
H Social Sciences > HB Economic Theory
H Social Sciences > HF Commerce
Publisher: Wiley-Blackwell
ISSN: 1540-5982
Last Modified: 04 Jun 2017 04:27
URI: http://orca-mwe.cf.ac.uk/id/eprint/39452

Citation Data

Cited 1 time in Google Scholar. View in Google Scholar

Cited 1 time in Scopus. View in Scopus. Powered By Scopus® Data

Actions (repository staff only)

Edit Item Edit Item