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On the competition between an online bookstore and a physical bookstore

Author

Listed:
  • Chih-Peng Chu
  • Wen-Chung Guo
  • Fu-Chuan Lai

Abstract

This study examines the relative competitiveness of online and physical bookstores. Online bookstores have the advantage of being able to provide a wide range of books while minimizing inventory costs, but customers must wait several days for their books. Physical bookstores allow consumers to immediately obtain their books, but consumers must pay a transportation cost to visit the store. We can find the condition such that online bookstores charge a lower price than physical bookstores and take a larger market share, and attract a higher proportion of consumers who prefer variety. The implication of the welfare analysis is also discussed. Copyright Springer Science+Business Media New York 2012

Suggested Citation

  • Chih-Peng Chu & Wen-Chung Guo & Fu-Chuan Lai, 2012. "On the competition between an online bookstore and a physical bookstore," Netnomics, Springer, vol. 13(3), pages 141-154, October.
    • Handle: RePEc:kap:netnom:v:13:y:2012:i:3:p:141-154
    DOI: 10.1007/s11066-012-9068-y
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    References listed on IDEAS

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