Journal Article

Pricing on the Internet

Arup Daripa and Sandeep Kapur

in Oxford Review of Economic Policy

Published on behalf of The Oxford Review of Economic Policy Ltd

Volume 17, issue 2, pages 202-216
Published in print June 2001 | ISSN: 0266-903X
Published online June 2001 | e-ISSN: 1460-2121 | DOI: http://dx.doi.org/10.1093/oxrep/17.2.202
Pricing on the Internet

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  • Economic Development and Growth
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It is often claimed that e‐commerce has created a more competitive environment by encouraging the entry of new online firms and by enabling buyers to search easily for the lowest prices. The limited evidence that exists paints a mixed picture. Many online markets are advertising‐ and technology‐intensive, creating a tendency towards growing concentration. Price search is imperfect and firms can dampen price competition by increasing product heterogeneity and switching costs. In many sectors, online firms may come to acquire some market power. We look at the forms of pricing that are likely to emerge in such markets, including the greater use of price discrimination and auction‐like trading arrangements.

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Subjects: Economic Development and Growth ; Public Economics ; Political Economy ; Public Policy

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