Competition between offline and online retailers with heterogeneous customers

Arbeitspapier

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 consumers are heterogeneous across two dimensions: (i) the costs of traveling to either of the offline retailers and (ii) 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.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ISER Discussion Paper ; No. 1056

Classification and Topics

• Classification: Wirtschaft ; Oligopoly and Other Imperfect Markets ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
• Subject: e-commerce ; game theory ; horizontal differentiation ; vertical differentiation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Colombo, Stefano ; Matsushima, Noriaki
• Event: Veröffentlichung
• (who): Osaka University, Institute of Social and Economic Research (ISER)
• (where): Osaka
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/230463