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Title: Internet Channel Entry: Retail Coverage and Entry Cost Advantage
Authors: Nault, Barrie R
Cheng, Zhuo (June)
Keywords: Business Management/Science;Computer Communication Newtworks;Operations Research/Decision Theory;Data Structures;Cryptology;Information Theory;Business Information Sysytems
Issue Date: Jun-2007
Publisher: Springer
Citation: Cheng, Z., and Nault, B.R., "Internet Channel Entry: Retail Coverage and Entry Cost Advantage," Information Technology Management, 8, 2 (June 2007), 111-133.
Abstract: In this research we study how existing market coverage affects the outcome of the Internet channel entry game between an existing retailer and a new entrant. A market is not covered when some consumers with low reservation prices are priced out by existing retailers and do not purchase. In a model with multiple existing retailers and a potential new entrant, we demonstrate that when entry costs are equal, one of the existing retailers enters the Internet channel first. However, if the market is covered by existing retailers before entry, then because of the threat of Internet channel entry by the potential new entrant, retailer entry cannibalizes existing retail profits—cannibalizing at a loss. In addition, if a potential new entrant has a slight advantage in Internet channel entry costs and the market is not covered by existing retailers, then the new entrant enters the Internet channel first. If the market is covered by existing retailers, then the new entrant must have a larger Internet channel entry cost advantage to be first to enter the Internet channel.
Description: *Springer: Author’s accepted manuscript can be posted 12 months after publication. Record requires: link to the published version (, The final publication is available at Springer via[10.1007/s10799-007-0015-9]”."See policy: Article deposited according to publisher's policy 06/11/2015
ISSN: 1385-951X (print)
1573-7667 (online)
Appears in Collections:Nault, Barrie R

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