Price dispersion in online retail There are a number of online booksellers that are popular in India right now. The prices they charge for the same book often differ by as much as 10% (See this price comparison site to check http://www.indiabookstore.net/)

Since these are homogenous goods and anyone who can access one of the stores can as easily assess another I wonder how we might explain this price dispersion. I have not done a systematic study but it is my impression that it is not the case that there is an ordering of prices between stores which is the same for different books.

I was wondering whether there are any economic models which can explain this dispersion. In particular are there models which can be tested by using panels of price data. 

[I confess I am fishing for a research topic.]
Yes, this has actually been quite an active area for research within the consumer search literature. As a starting point, I would recommend looking at the following:


BAYE, M. R., AND J. MORGAN (2001): “Information Gatekeepers on the Internet and the Competitiveness of Homogeneous Product Markets”, American Economic Review, 91(2), 454–474. These authors have a model that is interesting because it explains the persistence of price dispersion, even in environments like price comparison sites where one would ordinarily think that all consumers will buy from the lowest-priced merchant. The intuition is closely related to that of Varian's classic model of sales, if you know that. The idea is that some firms price low to sell to the consumers on the price comparison site, whilst others price high to sell to less-informed consumers who do not use the price comparison site and therefore do not compare as many prices.
BAYE, M. R., J. MORGAN AND P. SCHOLTEN (2004): “Price Dispersion in the Small and in the Large: Evidence From an Internet Price Comparison Site”, Journal of Industrial Economics, 52(4), 463–496. (older working paper link). This is interesting because they test various models (including the one mentioned above) against data from a price comparison site.
De Los Santos, B., A. Hortaçsu, and M. R. Wildenbeest (2012): "Testing Models of Consumer Search Using Data on Web Browsing and Purchasing Behavior." American Economic Review, 102(6), 2955-80. Not directly related to the question, but an interesting take on a similar issue. There are two classic models of consumer search: sequential and fixed-sample. In sequential search, consumers visit a merchant, evaluate its offer and decide whether to search again; repeating his process until they find an offer they are willing to accept. In fixed-sample search consumers first decide the number $n$ of merchants they will visit; they then visit precisely $n$ merchants and buy the best offer among them. Given dispersed prices, sequential search is optimal and the fixed-sample strategy is not. These authors test the two models against data from online retailers and find evidence to suggest that consumers use a strategy closer to the fixed-sample end of the spectrum.


A couple of extra references to finish up:


BAYE, M. R., J. MORGAN AND P. SCHOLTEN (2006): “Information, Search, and Price Dispersion”, in T. HENDERSHOTT (ed.) Handbook of Economics and Information Systems, Elsevier Science, 323–371 A nice survey of theories of search and price dispersion that can give you an idea of what work has been done on these general phenomena (and possibly some ideas of what can be empirically tested?).
ELLISON, G., AND S. F. ELLISON (2009): “Search, Obfuscation, and Price Elasticities on the Internet”, Econometrica, 77(2), 427–452 A study of how firms can obfuscate the search process to maintain market power in a frictionless context like a price comparison site. Ellison and Wolitzky also have a nice theoretical paper on this phenomenon in the RAND Journal of Economics.