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Competition in B2C eCommerce: Analytical Issues and Empirical Evidence

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Author Info
Stefan W. Schmitz (ICE, Austrian Academy of Sciences)
Michael Latzer (ICE, Austrian Academy of Sciences)

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Abstract

This paper questions the widely held view that B2C eCommerce markets are characterised by a high intensity of competition, using a mixture of theoretical arguments and empirical evidence. We discuss two hypothesis and survey empirical studies which test them. We argue that the goods sold in B2C eCommerce have to be interpreted as heterogeneous “composite goods”, that market transparency in B2C eCommerce is lower than widely assumed, and that high endogenous sunk costs limit the intensity of competition in B2C eCommerce.

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File URL: http://129.3.20.41/eps/io/papers/0211/0211001.pdf
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Publisher Info
Paper provided by EconWPA in its series Industrial Organization with number 0211001.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 27 pages
Date of creation: 04 Nov 2002
Date of revision:
Handle: RePEc:wpa:wuwpio:0211001

Note: Type of Document - pdf; prepared on wordfile on mac; pages: 27; figures: none. Revised version submitted to Electronic Markets
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Web page: http://129.3.20.41

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Related research
Keywords: Electronic commerce; competition; market structure; endogenous sunk costs;

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L - Industrial Organization
L - Industrial Organization

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References listed on IDEAS
Please 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.:
  1. Clay, Karen, et al, 2002. "Retail Strategies on the Web: Price and Non-price Competition in the Online Book Industry," Journal of Industrial Economics, Blackwell Publishing, vol. 50(3), pages 351-67, September. [Downloadable!] (restricted)
  2. Kathy Baylis & Jeffrey Perloff, 2001. "Price Dispersion on the Internet: Good Firms and Bad Firms," Institute for Research on Labor and Employment, Working Paper Series 1019, Institute of Industrial Relations, UC Berkeley. [Downloadable!]
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  3. Severin Borenstein & Garth Saloner, 2001. "Economics and Electronic Commerce," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 3-12, Winter. [Downloadable!] (restricted)
  4. Yannis Bakos, 2001. "The Emerging Landscape for Retail E-Commerce," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 69-80, Winter. [Downloadable!] (restricted)
  5. 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)
  6. Michael Smith & Erik Brynjolfsson, 1999. "Frictionless Commerce? A Comparison of Internet and Conventional Retailers," Computing in Economics and Finance 1999 1022, Society for Computational Economics.
  7. Yannis Bakos & Erik Brynjolfsson, 1997. "Bundling Information Goods: Pricing, Profits and Efficiency," Working Paper Series 199, MIT Center for Coordination Science. [Downloadable!]
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Cited by:
(explanations, Please 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.)

  1. 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!]
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