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Retail Strategies on the Web: Price and Non-price Competition in the Online Book Industry

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Author Info
Clay, Karen, et al

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Abstract

Two conflicting predictions have emerged regarding the effect of low-cost information on price. The first states that all Internet retailers will charge the same low price for mass produced goods. The second states that Internet retailers will differentiate to avoid intense price competition. Using data collected in April 1999 on the prices of 107 books in thirteen online and two physical bookstores, we find similar average prices online and in physical stores and substantial price dispersion online. Analysis of product differentiation yields no clear results. The substantial premium charged by Amazon provides indirect evidence of product differentiation. Copyright 2002 by Blackwell Publishing Ltd

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Publisher Info
Article provided by Blackwell Publishing in its journal Journal of Industrial Economics.

Volume (Year): 50 (2002)
Issue (Month): 3 (September)
Pages: 351-67
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Handle: RePEc:bla:jindec:v:50:y:2002:i:3:p:351-67

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821

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  1. Joel Waldfogel & Lu Chen, 2003. "Does Information Undermine Brand? Information Intermediary Use and Preference for Branded Web Retailers," NBER Working Papers 9942, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Michael R. Baye & John Morgan, 2005. "Red Queen Pricing Effects in E-Retail Markets," Working Papers 2005-07, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy. [Downloadable!]
  3. Zhenlin Yang & Lydia Gan & Fang-Fang Tang, 2007. "A Study of Pricing Evolution in the Online Toy Market," Economic Growth centre Working Paper Series 0704, Nanyang Technolgical University, School of Humanities and Social Sciences, Economic Growth centre. [Downloadable!]
    Other versions:
  4. Michael Thompson & Steve Thompson, 2006. "Pricing in a market without apparent horizontal differentiation: Evidence from web hosting services," Economics of Innovation and New Technology, Taylor and Francis Journals, vol. 15(7), pages 649-663, October. [Downloadable!] (restricted)
  5. Kolko, Jed, 2006. "Why Should Governments Support Broadband Adoption?," MPRA Paper 3363, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  6. Maarten C.W. Janssen & Rob van der Noll, 2005. "Internet Retailing as a Marketing Strategy," Tinbergen Institute Discussion Papers 05-038/1, Tinbergen Institute. [Downloadable!]
  7. Maris Goldmanis & Ali Hortacsu & Chad Syverson & Onsel Emre, 2008. "E-commerce and the Market Structure of Retail Industries," NBER Working Papers 14166, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  8. Christos Cabolis & Sofronis Clerides & Ioannis Ioannou & Daniel Senft, 2005. "A Textbook Example of International Price Discrimination," University of Cyprus Working Papers in Economics 3-2005, University of Cyprus Department of Economics. [Downloadable!]
    Other versions:
  9. Randy A. Nelson & Richard Cohen & Frederik Roy Rasmussen, 2007. "An Analysis of Pricing Strategy and Price Dispersion on the Internet," Eastern Economic Journal, Eastern Economic Association, vol. 33(1), pages 95-110, Winter. [Downloadable!]
  10. Zulima Fernández & María J. Nieto, 2005. "The Internet: Strategy And Boundaries Of The Firm," Business Economics Working Papers wb050101, Universidad Carlos III, Departamento de Economía de la Empresa. [Downloadable!]
  11. Häring, Julia, 2003. "Different Prices for Identical Products? : Market Efficiency and the Virtual Location in B2C E-Commerce," ZEW Discussion Papers 03-68, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  12. Jeffrey R. Brown & Austan Goolsbee, 2000. "Does the Internet Make Markets More Competitive?," NBER Working Papers 7996, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  13. Georg Müller & Mark Bergen & Shantanu Dutta & Daniel Levy, 2007. "Non-price rigidity and cost of adjustment," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 817-832. [Downloadable!]
  14. Pedro Pereira, 2004. "Some implications of search and switching costs for the price dynamics of electronic markets," International Journal of the Economics of Business, Taylor and Francis Journals, vol. 11(3), pages 303-327, November. [Downloadable!] (restricted)
  15. Brown, Jeffrey, 2000. "Does the Internet Make Markets More Competitive? Evidence from the Life Insurance Industry," Working Paper Series rwp00-007, Harvard University, John F. Kennedy School of Government. [Downloadable!]
    Other versions:
  16. Stefan W. Schmitz & Michael Latzer, 2002. "Competition in B2C eCommerce: Analytical Issues and Empirical Evidence," Industrial Organization 0211001, EconWPA. [Downloadable!]
  17. Brynjolfsson, Erik & Dick, Astrid Andrea & Smith, Michael D., 2004. "Search and Product Differentiation at an Internet Shopbot," Working papers 4441-03, Massachusetts Institute of Technology (MIT), Sloan School of Management. [Downloadable!]
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