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Quality differentiation and firms’ choices between online and physical markets

Chen, Yijuan; Hu, Xiangting; Li, Sanxi


We study firms’ choices between online and physical markets with respect to product quality and competition, and exam- ine consequences of transparency policies on price competition and market structure. We investigate two contrasting forces. First, since consumers cannot fully inspect an online prod- uct’s quality prior to purchase, conventional wisdom and some of the literature suggest that this attracts low-quality prod- ucts to the online market (a p o oling effect). On the other hand, the...[Show more]

CollectionsANU Research Publications
Date published: 2017-05
Type: Journal article
Source: International Journal of Industrial Organization
DOI: 10.1016/j.ijindorg.2017.01.003
Access Rights: Open Access


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