nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2007‒02‒03
two papers chosen by
Walter Frisch
University Vienna

  1. Bargaining and posted prices: what does the Internet change ? By Michael A. Arnold (Dpt of Economics, U. Delaware); Thierry Pénard (CREM – CNRS)
  2. On the Evolution of the Spatial Economy with Multi-unit・Multi-plant Firms: The Impact of IT Development By Fujita, Masahisa; Gokan, Toshitaka

  1. By: Michael A. Arnold (Dpt of Economics, U. Delaware); Thierry Pénard (CREM – CNRS)
    Abstract: The Internet has introduced a variety of online buying services that expand the reach of sellers and reduce search costs for buyers. In markets in which traditional outlets tend to establish prices through bargaining, these online intermediaries have also altered the price setting process. Perhaps the most well known example is which provides referral services in the automobile market. By using Autobytel, a buyer can obtain a posted price as an alternative to bargaining with a car dealer ship. To understand the effect of online referral systems on the price setting process, we construct a theoretical model of oligopolistic price competition in which one dealership has an exclusive contract with a referral intermediary. We show that posted prices offered through the referral system are not necessarily lower than offline prices (bargained prices). Our model provides theoretical insights relevant to results in the empirical literature addressing the role that Autobytel and other infomediaries play in online markets.
    Keywords: online markets, e-commerce, intermediary, autobytel, pricing
    JEL: D4 D83 L19 L89
    Date: 2007
  2. By: Fujita, Masahisa; Gokan, Toshitaka
    Keywords: Agglomeration, Headquarters, Plants, Supply chain, Re-location, Monopolistic competition, Information technologies (technology), International division of labor, Costs, Communication, International trade, G World,others
    JEL: F12 L13 R13
    Date: 2006–10

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