Abstract

http://ssrn.com/abstract=275425
 
 

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Competition in the Computer Industry


Austan Goolsbee


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

July 2001

NBER Working Paper No. w8351

Abstract:     
This paper estimates the relative price sensitivity of individuals' choice of whether to buy computers online versus in retail stores using a new data source on the computer purchase behavior of more than 20,000 people. To estimate the degree of competition between the two channels, the paper uses a two step approach. First, it fits hedonic regressions for the prices paid for a computer in a retail store as a function of characteristics. The coefficients on the city fixed effects in these regressions give a measure of the retail price level The second stage then looks at whether individuals purchase their computers in stores versus online as a function of the retail price and their own personal characteristics. The results indicate that the decision to buy remotely is sensitive to the relative price of computers in retail stores and that it varies by type of customer and type of computer. Conditional on buying a computer, the overall elasticity of buying remotely with respect to retail store prices is about 1.5.

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Date posted: June 28, 2001  

Suggested Citation

Goolsbee, Austan, Competition in the Computer Industry (July 2001). NBER Working Paper Series, Vol. w8351, pp. -, 2001. Available at SSRN: http://ssrn.com/abstract=275425

Contact Information

Austan Goolsbee (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-5869 (Phone)
773-702-0458 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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