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The Impact of the Internet on Retail Competition: Evidence from Technological Differences in Internet Access

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  • Gebhardt, Georg

Abstract

Does the internet increase competition? To address this question, I exploit two institutional details unique to Germany: (1) Some municipalities received glass fibre cables that cannot be upgraded to DSL; I use these municipalities as a treatment group with reduced online competition. (2) German law mandates resale price maintenance for books; I compare three retailing sectors, electronics (price competition), books (no price competition), and food (no online sales), to identify the effect of price competition: The effect of price competition is highly significant. Full broadband access reduces offline electronics retailers’ producer rents by 1.5 percent per year from 1999 to 2007.

Suggested Citation

  • Gebhardt, Georg, 2010. "The Impact of the Internet on Retail Competition: Evidence from Technological Differences in Internet Access," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 345, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  • Handle: RePEc:trf:wpaper:345
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    File URL: https://epub.ub.uni-muenchen.de/13209/1/345.pdf
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    Cited by:

    1. Bauernschuster, Stefan & Falck, Oliver & Woessmann, Ludger, 2014. "Surfing alone? The internet and social capital: Evidence from an unforeseeable technological mistake," Journal of Public Economics, Elsevier, vol. 117(C), pages 73-89.

    More about this item

    Keywords

    Internet; Market Structure; Retail Competition; Differences in Differences;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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