S-WoPEc
 
Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
The Economic Research Institute, Stockholm School of Economics SSE/EFI Working Paper Series in Economics and Finance

No 389:
E-commerce and prices - theory and evidence

Richard Friberg (), Mattias Ganslandt () and Mikael Sandström ()

Abstract: This paper examines the relation between prices in conventional stores and on the Internet. Main results from the theoretical analysis are i) we expect a discrete fall in prices in conventional stores as the share of the population with access to Internet reaches a critical level, ii) the relation between prices depends on convenience costs of shopping in regular stores as well as on transport and navigation costs for goods bought over Internet, iii) retailers who only sell through Internet have lower on-line prices than retailers who also sell through conventional stores. The empirical section employs a rich data set covering the Swedish markets for books and CDs. Prices of these goods are on average 15 percent lower on Internet, but if a single item is bought transport costs will make it as expensive to buy over Internet as in a regular store (if a basket of goods is bought it is some 10 percent cheaper on Internet since transport costs are fixed). There is firm support for that retailers who only sell over Internet have lower on-line prices.

Keywords: retail pricing; consumer behavior; e-commerce; price discrimination; Internet; (follow links to similar papers)

JEL-Codes: D12; D43; L11; L81; (follow links to similar papers)

35 pages, June 18, 2000, Revised September 8, 2000

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

hastef0389.pdf    PDF-file (414kB) 
Download Statistics

Questions (including download problems) about the papers in this series should be directed to Helena Lundin ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:hastef:0389 This page was generated on 2014-12-14 19:23:00