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THE IMPACT OF ONLINE SALES ON CONSUMERS AND FIRMS.

a b s t r a c t  

In this paper we estimate a differentiated products demand model to ask three questions regarding the introduction of e- commerce. First, we ask whether the online distribution chan- nel has increased total sales, or only diverted sales from tra- ditional channels. We find that there is a market expansion effect but also a considerable sales diversion. Second, we ask to which extent consumers and firms benefited from the intro- duction of the online sales channel. We find that consumers b enefited prop ortionately more, and this is entirely due to the appearance of an additional distribution channel and not due

Keywords:

Online sales Offline sales Nested logit

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