Effects of Consumer Online Purchase Costs On Online and Traditional Retailers
Our research provides a useful framework to help business marketers identify the effect of consumer online purchase costs on firm performances in online and traditional channel competition. A game theory model is developed to determine the optimal strategies for online and traditional retailers. We demonstrate that consumer online purchase costs always have a valuable impact on firm profits, and further show that consumer online purchase costs always have a much more valuable impact on firm profits whenever the traditional retail transaction costs and the product web-fit change. We also find that consumer online purchase costs have a greater impact on the retailer's profits in a Stackelberg competitive system than in a Bertrand competitive system. Based on our results, managerial implications are discussed and probable paths of future research are identified.
MSU Digital Commons Citation
Yan, Ruiliang and Wang, John, "Effects of Consumer Online Purchase Costs On Online and Traditional Retailers" (2009). Department of Information Management and Business Analytics Faculty Scholarship and Creative Works. 67.