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Article: Brynjolfsson and Smith.(Brief Article)
- Article from:
- NBER Reporter
- Article date:
- March 22, 2000
CopyrightCOPYRIGHT 2000 National Bureau of Economic Research, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Brynjolfsson and Smith analyze the characteristics of the Internet as a channel for two categories of homogeneous products: books and CDs. Comparing pricing behavior at 41 Internet and conventional retail outlets, the authors find that prices on the Internet are 9 to 16 percent lower than prices in conventional outlets, depending on whether taxes, shipping, and shopping costs are included in the price. In addition, they find that Internet retailers' price adjustments over time are up to 100 times smaller than conventional retailers' price adjustments, presumably reflecting lower menu costs in Internet channels. Brynjolfsson and Smith also find that levels of price ...