Pricing Strategies in E-Commerce: Bricks vs. Clicks
Abstract
What is the impact of the increasing dominance of conventional firms in e-commerce? We use a simple model to show that retailers who only sell through Internet have lower on-line prices than retailers who also sell through conventional stores. This proposition is firmly supported by our empirical analysis which uses a rich data set covering the Swedish markets for books and CDs. On average, prices of these goods are 15 percent cheaper on Internet, but if a single item is bought transport costs will make it as expensive to buy over Internet as in a conventional store (if a basket of goods is bought it is some 10 percent cheaper on Internet since transport costs are fixed).Download Info
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Bibliographic Info
Paper provided by Research Institute of Industrial Economics (IFN) in its series Research Institute of Industrial Economics Working Papers with number 559.Length: 17 pages
Date of creation: 2001
Date of revision:
Handle: RePEc:fth:iniesr:559
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Postal: Research Institute of Industrial Economics (IFN) ; B.O. Box 55665, SE-102 15 Stockholm, Sweden
Phone: +46 8 665 4500
Fax: +46 8 665 4599
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Web page: http://www.ifn.se/
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Related research
Keywords: PRICING ; CONSUMPTION ; BEHAVIOUR ; DISCRIMINATION;Other versions of this item:
- Friberg, Richard & Ganslandt, Mattias & Sandström, Mikael, 2001. "Pricing Strategies in E-Commerce: Bricks vs. Clicks," Working Paper Series 559, Research Institute of Industrial Economics.
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
References
References listed on IDEASPlease report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Maarten C.W. Janssen & Rob van der Noll, 2005. "Internet Retailing as a Marketing Strategy," Tinbergen Institute Discussion Papers 05-038/1, Tinbergen Institute.
- Eric Brousseau, 2002. "The Governance of Transactions by Commercial Intermediaries: An Analysis of the Re-engineering of Intermediation by Electronic Commerce," International Journal of the Economics of Business, Taylor and Francis Journals, vol. 9(3), pages 353-374.
- Dinlersoz, Emin M. & Pereira, Pedro, 2007.
"On the diffusion of electronic commerce,"
International Journal of Industrial Organization,
Elsevier, vol. 25(3), pages 541-574, June.
- Emin M. Dinlersoz & Pedro Pereira, 2006. "On the Diffusion of Electronic Commerce," Working Papers 13, Portuguese Competition Authority.
- Michael R. Baye & John Morgan & Patrick Scholten, 2006. "Information, Search, and Price Dispersion," Working Papers 2006-11, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
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