The impact of e-commerce and its implications in the automobile industry: a social welfare approach

Yuji Nakayama

International Journal of Automotive Technology and Management, 2002, vol. 2, issue 2, 159-176

Abstract: In this paper, I examine the effect of e-commerce on our economy. After reviewing some empirical evidence about e-commerce in various fields including the automobile industry, I numerically assess the impact of e-commerce by using the Nakayama and Nishimura model [1] where conventional and electronic retailers compete in a retail market. Then, I point out that whilst e-commerce greatly benefits consumers, it probably damages business and possibly our economy. However, I also point out that these results depend crucially on the following two assumptions: firstly, e-commerce does not increase market demand, and secondly no price and product differentiation prevails. Finally, I propose a measure for e-commerce to become a promising business model for the auto industry, creating a situation where the two assumptions do not hold.

Keywords: spatial model; e-commerce; online car buying service. (search for similar items in EconPapers)
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijatma:v:2:y:2002:i:2:p:159-176

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