Pricing Strategies in E-Commerce: Bricks vs. Clicks

Richard Friberg, Mattias Ganslandt (mattias.ganslandt@celec.eu) and Mikael Sandström

No 559, Working Paper Series from Research Institute of Industrial Economics

Abstract: What is the impact of the increasing dominance of conventional firms in e-commerce? We use a simple model to show that retailers who only sell through Internet have lower on-line prices than retailers who also sell through conventional stores. This proposition is firmly supported by our empirical analysis which uses a rich data set covering the Swedish markets for books and CDs. On average, prices of these goods are 15 percent cheaper on Internet, but if a single item is bought transport costs will make it as expensive to buy over Internet as in a conventional store (if a basket of goods is bought it is some 10 percent cheaper on Internet since transport costs are fixed).

Keywords: Retail Pricing; Consumer Behavior; E-Commerce; Price Discrimination (search for similar items in EconPapers)
JEL-codes: D12 D43 L11 L81 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2001-06-21
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0559

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