Selling cross-border in online markets: The impact of the ban on geoblocking strategies

Marc Bourreau and Fabio M. Manenti

International Journal of Industrial Organization, 2023, vol. 86, issue C

Abstract: We develop a model of strategic geoblocking, where two competing multi-channel retailers, located in different countries, can decide to block access to their online store from foreign consumers. We characterize the equilibrium when firms decide unilaterally whether to introduce geoblocking restrictions. We show that geoblocking allows firms to soften competition, but at the cost of lower demand. A ban on geoblocking leads to lower prices, both offline and online. However, when firms can invest in increasing online demand, the ban may have adverse effects on investment and social welfare. We extend our analysis to account for price discrimination and investigate the role of shipping costs.

Keywords: Cross-border sales; Geoblocking; E-commerce; Investment (search for similar items in EconPapers)
Date: 2023
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Related works:
Working Paper: Selling Cross-Border in Online Markets: The Impact of the Ban on Geoblocking Strategies (2022)
Working Paper: Selling Cross-Border in Online Markets: The Impact of the Ban on Geoblocking Strategies (2020)
Working Paper: SELLING CROSS-BORDER IN ONLINE MARKETS: THE IMPACT OF THE BAN ON GEOBLOCKING STRATEGIES (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:86:y:2023:i:c:s0167718722000674

DOI: 10.1016/j.ijindorg.2022.102892

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