PRICING BEHAVIOR OF A CONVENTIONAL RETAILER'S ONLINE-BRANCH

Ding Lu

The Singapore Economic Review (SER), 2003, vol. 48, issue 02, 173-179

Abstract: This paper presents a simple model to interpret the business rationale for a conventional retailer with market power to develop its online business in the presence of an e-commerce rival. The model shows that the online branch of a conventional retailer tends to sell products at a higher price level than its dot.com rival. The participation of the conventional retailer in the online market may increase the average online prices. The conventional retailer will compete aggressively in price only when the cost-saving benefit of online sale is sufficiently large.

Keywords: E-commerce; Online retail prices (search for similar items in EconPapers)
Date: 2003
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DOI: 10.1142/S0217590803000700

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