Electronic Commerce, Consumer Search and Retailing Cost Reduction

2001/10/02 by Pedro Pereira, Pereira, Pedro, Cristina Mazón +1
Business, Management and Accounting · Computer Science · Engineering · #Consumer Market Behavior and Pricing #Digital Platforms and Economics #ICT Impact and Policies #cs.HC

paper · pdf · doi:10.48550/arxiv.cs/0110006

29th TPRC Conference, 2001

arxiv created 2001/10/02 · arxiv updated 2009/11/30

Abstract

This paper explains four things in a unified way. First, how e-commerce can generate price equilibria where physical shops either compete with virtual shops for consumers with Internet access, or alternatively, sell only to consumers with no Internet access. Second, how these price equilibria might involve price dispersion on-line. Third, why prices may be higher on-line. Fourth, why established firms can, but need not, be more reluctant than newly created firm to adopt e-commerce. For this purpose we develop a model where e-commerce reduces consumers' search costs, involves trade-offs for consumers, and reduces retailing costs.

Related

• The Competitiveness of On-Line vis-a-vis Conventional Retailing: A Preliminary Study
• The impact of price adjustment costs on price dispersion in E-commerce
• The cost of shopping: measuring virtual and physical access for obtaining goods
• Greater search cost reduces prices
• Monopoly Power on the Web - A Preliminary Investigation of Search Engines