Sunday, December 7, 2008
I just finished my term paper for Industrial Organization. I was trying to develop a theoretical model that could explain why some goods are available only online and others are only carried inside a store owned by the same company. I'd like to figure out a way to attach the .pdf here. Anyway, when I started out, I could only get the good to be sold online or only in the store. I couldn't get neither or both at the same time. I had to throw in some consumer heterogeneity and fixed costs of selling a good online or in the store. In the end, I got the result to hinge on what the transaction costs are for each retail outlet (online v. in store) combined with the fixed costs. If you're interested, let me know and I'll email you the .pdf. I normally don't like my own work, but I like this one a lot.