Competition Between Online and Physical Stores: The Implications of Providing Product Information by Pure-Play E-tailer

Ryohei Tojo, Nobuo Matsubayashi

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

This paper studies the competition between a single pure-play e-tailer and a bricks-and-mortar retailer, which are originally spatially differentiated. By utilizing information and communication technology, a pure-play e-tailer can strategically control consumers' disutility for online purchase. However, such an action may also raise consumers' motivation to visit the physical store, which causes free-riding by the bricks-and-mortar retailer. We show that in the presence of a high free-riding effect, the e-tailer should be willing to provide information only about 'niche' products, which also results in improving the welfare of all members in the market.

Original languageEnglish
Pages (from-to)281-292
Number of pages12
JournalManagerial and Decision Economics
Volume32
Issue number5
DOIs
Publication statusPublished - 2011 Jul 1

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management
  • Management Science and Operations Research
  • Management of Technology and Innovation

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