Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Tuesday, January 4, 2011

The Impact of the Internet on Retail Competition: Evidence from Technological Differences in Internet Access

Posted by D. Daniel Sokol

Georg Gebhardt (University of Munich) provides research on The Impact of the Internet on Retail Competition: Evidence from Technological Differences in Internet Access.

ABSTRACT: Does the internet increase competition? To address this question, I exploit two institutional details unique to Germany: (1) Some municipalities received glass fibre cables that cannot be upgraded to DSL; I use these municipalities as a treatment group with reduced online competition. (2) German law mandates resale price maintenance for books; I compare three retailing sectors, electronics (price competition), books (no price competition), and food (no online sales), to identify the effect of price competition: The effect of price competition is highly significant. Full broadband access reduces offline electronics retailers’ producer rents by 1.5 percent per year from 1999 to 2007.

http://lawprofessors.typepad.com/antitrustprof_blog/2011/01/the-impact-of-the-internet-on-retail-competition-evidence-from-technological-differences-in-internet.html

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