Does Internet Always Intensify Price Competition?

Scientific Research 1

Does Internet Always Intensify Price Competition?
Rajiv Lal, Miklos Sarvary (April 1998)
Graduate School of Business, Stanford University

Summary
The research paper discusses the primary role of the Internet on different kinds of business practices. It tells that internet is a significant factor in the price competition in the global market. It cited two important attributes that must be recognized in order to distinguish the difference in buying in the store from buying in the internet, namely digital and non-digital attributes of the products or the services. It also provides formulas which are used in presenting the probability of the effects of the internet in various aspects of business practices. It uses direct observations and statistics in derivation of the conclusion.

Evaluation
Upon reading, I realized that internet doesn’t always intensify price competition. Yes, it plays an important role in business market but it does not necessarily mean that there is an assurance that there are lots of people shopping in the internet. Even though there are lots of advantages given by the internet, evaluating the product’s quality cannot be made in the internet since it just provides description of the product which affects the evaluation of fair pricing.

References
https://gsbapps.stanford.edu/researchpapers/library/rp1457R.pdf