Effects of consumer online purchase costs on online and traditional retailers

Ruiliang Yan, John Wang

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

Our research provides a useful framework to help business marketers identify the effect of consumer online purchase costs on firm performances in online and traditional channel competition. A game theory model is developed to determine the optimal strategies for online and traditional retailers. We demonstrate that consumer online purchase costs always have a valuable impact on firm profits, and further show that consumer online purchase costs always have a much more valuable impact on firm profits whenever the traditional retail transaction costs and the product web-fit change. We also find that consumer online purchase costs have a greater impact on the retailer's profits in a Stackelberg competitive system than in a Bertrand competitive system. Based on our results, managerial implications are discussed and probable paths of future research are identified.

Original languageEnglish
Pages (from-to)351-371
Number of pages21
JournalInternational Journal of Business and Systems Research
Volume3
Issue number3
DOIs
StatePublished - 1 Jan 2009

Keywords

  • Consumer online purchase costs
  • Distribution channels
  • Game theory
  • Marketing strategies
  • Online retailing
  • Systems

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