Advanced Search
MyIDEAS: Login

The shop around the corner in the Internet age

Contents:

Author Info

  • Jérôme Foncel
  • Marianne Guyot
  • Frédéric Jouneau-Sion
Registered author(s):

    Abstract

    We study a spatial competition model which is a variant of the celebrated Hotelling (1929) framework. One of the firm is a brick-and-mortar one while the other is on-line. Both firms sell the same product except that (constant) marginal costs may differ. Consumers going to the shop around the corner face transportation costs according to their adress whereas on-line consumers bear a fix cost that may capture technological burden and risk premium. In the pricing Nash equilibria the ?new economy? firm has smaller market shares eventhough it offers more attractive prices. For the on-line firm to become a leader, the cost difference must be large enough to offset the comparative disadvantage it face on the demand side. In the long run, increasing competition ultimately forces the local firm out of downtown. We argue that this effect may be related to some of the forecasts concerning the geographical impact of the development of remote access services. JEL classification: R12, L86, L11

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.cairn.info/load_pdf.php?ID_ARTICLE=REL_772_0047
    Download Restriction: restricted

    File URL: http://www.cairn.info/revue-recherches-economiques-de-louvain-2011-2-page-47.htm
    Download Restriction: restricted

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by De Boeck Université in its journal Recherches économiques de Louvain.

    Volume (Year): 77 (2011)
    Issue (Month): 2 ()
    Pages: 47-85

    as in new window
    Handle: RePEc:cai:reldbu:rel_772_0047

    Contact details of provider:
    Web page: http://www.cairn.info/revue-recherches-economiques-de-louvain.htm

    Related research

    Keywords: spatial competition; economic geography; E-marketing;

    Find related papers by JEL classification:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:cai:reldbu:rel_772_0047. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jean-Baptiste de Vathaire).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.