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Cited by 1,173

The DOI matches its Crossref record; 1 of the 1 references it cites were found in a registry or an index.

Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers

Brynjolfsson, Erik, Hu, Yu (Jeffrey), Smith, Michael D.·2003·Management Science
DOI 10.1287/mnsc.49.11.1580.20580
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Abstract

We present a framework and empirical estimates that quantify the economic impact of increased product variety made available through electronic markets. While efficiency gains from increased competition significantly enhance consumer surplus, for instance, by leading to lower average selling prices, our present research shows that increased product variety made available through electronic markets can be a significantly larger source of consumer surplus gains. One reason for increased product variety on the Internet is the ability of online retailers to catalog, recommend, and provide a large number of products for sale. For example, the number of book titles available at Amazon.com is more than 23 times larger than the number of books on the shelves of a typical Barnes & Noble superstore, and 57 times greater than the number of books stocked in a typical large independent bookstore. Our analysis indicates that the increased product variety of online bookstores enhanced consumer welfare by $731 million to $1.03 billion in the year 2000, which is between 7 and 10 times as large as the consumer welfare gain from increased competition and lower prices in this market. There may also be large welfare gains in other SKU-intensive consumer goods such as music, movies, consumer electronics, and computer software and hardware.

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Metadata

Authors
Brynjolfsson, E., Hu, Y. (., & Smith, M. D.
Venue
Management Science
Publisher
Institute for Operations Research and the Management Sciences (INFORMS)
Published
2003-11
Volume
49
Issue
11
Pages
1580-1596
ISSN
  • 0025-1909 (ISSN-L)
  • 1526-5501
DOI
10.1287/mnsc.49.11.1580.20580
OpenAlex
W3124392856
Cited by
1,173
References
1
FWCI
90.63
Type
journal article
Language
en
Open access
closed

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