search query: @indexterm PRODUCT DEVELOPMENT / total: 1086
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| Author: | Loginova, O. |
| Title: | Real and virtual competition |
| Journal: | Journal of Industrial Economics
2009 : JUN, VOL. 57:2, p. 319-342 |
| Index terms: | competition product development consumers virtual organizations internet |
| Language: | eng |
| Abstract: | Goods sold by electronic firms are not perfect substitutes for otherwise identical goods their offline counterparts sell. Online purchases come with waiting costs, and they do not let consumers inspect the product before purchase. A visit to a conventional retailer, on the other hand, includes positive travelling costs. In this article I extend the circular city model to include two firm types, conventional and electronic. Under some parameter configurations, conventional stores are shown to actually raise their prices in response to electronic firms' entry. As a result, economic welfare goes down. |
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