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The Internet's Impact on Competition, Free Riding and The Future of Sales Service in Retail Automobile Markets

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  • Ellen Sewell

    () (Department of Economics, The University of North Carolina at Charlotte, 9201 University City Blvd., Charlotte, NC 28223, USA.)

  • Charles Bodkin

    () (Department of Economics, The University of North Carolina at Charlotte, 9201 University City Blvd., Charlotte, NC 28223, USA.)

Abstract

This paper investigates the impact of the internet on intra-brand competition in new car markets by empirically examining its role in the search process. The model is a two-equation simultaneous system with one continuous and one dichotomous dependent variable. Equation one explains the overall amount of intra-brand search while equation two explains the decision to utilize the internet in the search process. Having established a significant increase in intra-brand competition, the paper proceeds to address the impact on free riding in retail automobile markets, long argued to be the likely outcome of excessive intra-brand competition. Eastern Economic Journal (2009) 35, 96–114. doi:10.1057/palgrave.eej.9050046

Suggested Citation

  • Ellen Sewell & Charles Bodkin, 2009. "The Internet's Impact on Competition, Free Riding and The Future of Sales Service in Retail Automobile Markets," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 35(1), pages 96-114.
  • Handle: RePEc:pal:easeco:v:35:y:2009:i:1:p:96-114
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