Competition Between Offline and Online Retailers with Heterogeneous Customers

Stefano Colombo, Noriaki Matsushima

Risultato della ricerca: Contributo in rivistaArticolo in rivista

2 Citazioni (Scopus)

Abstract

We consider the spatial competition between two traditional physical (or offline) retailers and an Internet (or online) retailer where the efficiency of the latter differs from that of the former. We assume that consumers are heterogeneous across two dimensions: (1) the costs of traveling to either of the offline retailers; and (2) the costs of purchasing from the online retailer. Both dimensions depend on the spatial location of consumers and are independent of each other. We show that the online retailer maximizes its profit at an intermediate level of the consumer disutility of online purchase when its efficiency is low.
Lingua originaleEnglish
pagine (da-a)647-664
Numero di pagine18
RivistaReview of Industrial Organization
Volume57
DOI
Stato di pubblicazionePubblicato - 2020

Keywords

  • E-commerce
  • Game theory
  • Horizontal differentiation
  • Vertical differentiation

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