Competition between offline and online retailers with heterogeneous customers

Colombo, Stefano; Matsushima, Noriaki

Institute of Social and Economic Research Discussion Papers, 2019, 1056, 1-50

Number of Access:424（2025-07-24 04:41 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/11094/73001

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Title
Competition between offline and online retailers with heterogeneous customers
Creator
CreatorName
Colombo, Stefano
NRID
1000080334879 1000080334879
ORCID
0000-0002-7865-3875 0000-0002-7865-3875
researchmap permalink
read0116301 read0116301
Scopus Author ID
7005645778 7005645778
CreatorName
Matsushima, Noriaki
Subject
e-commerce
game theory
horizontal differentiation
vertical differentiation
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 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.
Publisher
The Institute of Social and Economic Research, Osaka University
Source Title
Institute of Social and Economic Research Discussion Papers
Volume (Issue)
1056
Page
1-50
Date of Issued
2019-05
Language
English
Handle URL
https://hdl.handle.net/11094/73001
Relation.references
URI
https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2019/DP1056.pdf
Access Rights
metadata only access
Category
ディスカッション／ワーキング・ペーパー DP/WP
Institute of Social and Economic Research Discussion Papers