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Internet Car Retailing

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  • Fiona Scott Morton
  • Florian Zettelmeyer
  • Jorge Silva‐Risso

Abstract

We investigate the effect of Internet car referral services on dealer pricing of automobiles in California. Customers of an online service pay on average 2% less for their car ($450 for the average car). 25% of the savings come from purchasing at low‐price dealerships affiliated with the online service. The remaining 75% stem from information provision by the online service, bargaining by the service on behalf of consumers, and cost efficiencies. A consumer receiving the mean online price does better than 65% of offline consumers, conditional on the car being purchased.

Suggested Citation

  • Fiona Scott Morton & Florian Zettelmeyer & Jorge Silva‐Risso, 2001. "Internet Car Retailing," Journal of Industrial Economics, Wiley Blackwell, vol. 49(4), pages 501-519, December.
    • Handle: RePEc:bla:jindec:v:49:y:2001:i:4:p:501-519
    DOI: 10.1111/1467-6451.00160
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