Competition and Growth in Virtual Markets

Conclusions

This chapter attempts to provide some useful insights into the understanding of fundamental tradeoffs faced by B&M and Virtual firms competing in Virtual marketplaces for Type-2 customers. An innovation contained in the paper is the establishment of a link between firm relative locations within the Virtual market to investment and ultimately profits. This innovation enabled the derivation of some testable predictions. Some ways to move beyond current model assumptions could be the consideration of non-uniform distributions of Virtual consumers (in particular non-symmetric distributions due to the skewed age distribution of customers making purchases online), the introduction of market power and allowing both the B&M and Virtual markets to be made open to competition.