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Dividing Online and Offline: A Case Study

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  • Ginger Zhe Jin
  • Andrew Kato

Abstract

Every new method of trade offers an opportunity for economic agents to compare its costs and benefits relative to the status quo. Such comparison motivates sorting across market segments and reshapes the whole marketplace. The Internet provides an excellent example: it introduces substantial search cost savings over brick and mortar retail stores but imposes new obstacles for sellers to convey quality. Using sports card trading as a case study, we provide empirical evidence on (1) the sorting of product quality between the online and offline segments, (2) the changes for retail outlets after the Internet came into place, and (3) how supporting industries such as professional grading and card manufacturing adapted to take advantage of the new market. Copyright 2007, Wiley-Blackwell.

Suggested Citation

  • Ginger Zhe Jin & Andrew Kato, 2007. "Dividing Online and Offline: A Case Study," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(3), pages 981-1004.
    • Handle: RePEc:oup:restud:v:74:y:2007:i:3:p:981-1004
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    File URL: http://hdl.handle.net/10.1111/j.1467-937X.2007.00434.x
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