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Electronic commerce, consumer search and retailing cost reduction

Cristina Mazón and Pedro Pereira

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: This paper explains three things in a unified way. First, how e-commerce can generate price equilibria, where physical shops either compete with virtual shops for consumers with Internet access, or alternatively, sell only to consumers with no Internet access. Second, how these price equilibria might involve price dispersion on-line. Third, why prices may be higher on-line. For this purpose we develop a model where e-commerce: reduces consumers search costs, involves trade-offs for consumers, and reduces retailing costs.

Date: 2001-12
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Working Paper: Electronic commerce, consumer search and reailing cost reduction (2001) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:we016722

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