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CESifo Economic Studies 2005 51(2-3):261-294; doi:10.1093/cesifo/51.2-3.261
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Right arrow L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
Right arrow L81 - Retail and Wholesale Trade; e-Commerce
Right arrow O33 - Technological Change: Choices and Consequences; Diffusion Processes
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© Ifo Institute for Economic Research, Munich, 2005

Patterns of Diffusion of Electronic Commerce in Retail Industries: Theory and Evidence

Emin M. Dinlersoz and Pedro Pereira*

* Emin M Dinlersoz: Department of Economics, University of Houston 204 McElhinney Hall, Houston, TX, 77204-5019 USA e-mail: edinlers{at}mail.uh.edu. Pedro Pereira: Portuguese Competition Authority Avenida Laura Alves, n 4, 1050-138 Lisbon, Portugal e-mail: ppereira{at}autoridadedaconcorrencia.pt.

This paper puts into perspective the early patterns of retailers' adoption of e-commerce across product categories and firm types. The focus is on understanding how consumer loyalty, differences in firms' technology and consumers' preferences across the traditional versus the virtual market, and expansion in market size made possible by the Internet affected the timing and sequence of adoption by firms, as well as the post-adoption evolution of prices. The empirical evidence on adoption patterns is discussed in the light of the predictions from a model of technology adoption. (JEL L11, L811, O33)


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