SEMINARIO DI ECONOMIA

GIOVEDI’ 7 MAGGIO ALLE ORE 13:00
nell’aula seminari al primo piano pal. C

Stefano Colombo (Università Cattolica di Milano)
e Noriaki Matsushima (Osaka University).

Terranno un seminario dal titolo:

"Lowering customer costs in competition between physical and internet retailers: does it always pay?"

Abstract:
We consider an internet store competing against two physical stores. We introduce heterogeneity of consumers in the disutility for purchasing from internet, and we focus on the following question: should the internet store reduce the disutility of consumers for purchasing from it? We show that when the physical stores are in face-to-face competition, a decrease in the disutility of consumers nonmonotonically influences the internet store's profits. Indeed, under certa in conditions, when the disutility of consumers decreases, the internet store loses the ability to segment the market well and increases competition between its rivals. This may damage the internet store.