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

Ellen Sewell () and Charles Bodkin ()
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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.

Eastern Economic Journal, 2009, vol. 35, issue 1, 96-114

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

Date: 2009
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