The Longtail and Free Flow Of Internet Commerce
Sunday, January 25th, 2009There have been many claims that the Internet represents a new nearly frictionless market. The characteristics of the Internet as a channel for two categories of homogeneous products books and CDs. Additionally the Internet e-tailers’ price adjustments over time are up to 100 times smaller than conventional e-tailers’ price adjustments – presumably reflecting lower menu costs in Internet channels. The levels of price dispersion depend importantly on the measures employed. When compare the prices posted by different Internet e-tailers it is find substantial dispersion.