publication . Preprint . 2002

"Does e-Commerce Always Increase Social Welfare in the Long Run?"

Yuji Nakayama; Kiyohiko G. Nishimura;
Open Access
  • Published: 01 Jan 2002
Abstract
We examine the effect of electronic commerce ("e-commerce") on social welfare, in the framework of conventional spatial competition models. We consider the case where both conventional and electronic retailers coexist in equilibrium. We show that e-commerce does not necessarily increase social welfare in the long run. In particular, when electronic retailers have clear cost advantage over conventional retailers, then the advent of e-commerce is shown to reduce social welfare.
Subjects
ACM Computing Classification System: TheoryofComputation_GENERAL

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