Electronic commerce is the exchange, distribution, or marketing of goods or services over the Internet. This article first reviews electronic commerce adoption across US industries. While the Internet is used in most industries, it has had a profound impact only on a small number. Businesses that rely heavily on electronic commerce can be divided into four groups: retail, media, business-to-business and other intermediaries. Each of these is discussed. The article concludes with a discussion of some features of electronic commerce that are of special interest to economists: lower economic frictions, lower communication costs, lower marginal costs and rich data.
KeywordsAdvertising Bundling Communication costs Computer industry Economic frictions Electronic commerce Internet, economics of the Media Menu costs Price dispersion Retail Search costs Switching costs
JEL ClassificationsL81 L86
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