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 provide a large number of products for sale. For example, the number of book titles available at Amazon.com is over 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 at least five 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.
Many markets have historically been dominated by a small number of best-selling products. The Pareto principle, also known as the 80/20 rule, describes this common pattern of sales concentration. However, information technology in general and Internet markets in particular have the potential to substantially increase the collective share of niche products, thereby creating a longer tail in the distribution of sales. This paper investigates the Internet's "long tail" phenomenon. By analyzing data collected from a multichannel retailer, it provides empirical evidence that the Internet channel exhibits a significantly less concentrated sales distribution when compared with traditional channels. Previous explanations for this result have focused on differences in product availability between channels. However, we demonstrate that the result survives even when the Internet and traditional channels share exactly the same product availability and prices. Instead, we find that consumers' usage of Internet search and discovery tools, such as recommendation engines, are associated with an increase the share of niche products. We conclude that the Internet's long tail is not solely due to the increase in product selection but may also partly reflect lower search costs on the Internet. If the relationships we uncover persist, the underlying trends in technology portend an ongoing shift in the distribution of product sales. This paper was accepted by Ramayya Krishnan, information systems.long tail, search cost, product variety, concentration, product sales, Internet, electronic commerce
A key question for Internet commerce is the nature of competition with traditional brick-and-mortar retailers. Although traditional retailers vastly outsell Internet retailers in most product categories, research on Internet retailing has largely neglected this fundamental dimension of competition. Is cross-channel competition significant, and, if so, how and where can Internet retailers win this battle? This paper attempts to answer these questions using a unique combination of data sets. We collect data on local market structures for traditional retailers, and then match these data to a data set on consumer demand via two direct channels: Internet and catalog. Our analyses show that Internet retailers face significant competition from brick-and-mortar retailers when selling mainstream products, but are virtually immune from competition when selling niche products. Furthermore, since the Internet channel sells proportionately more niche products than the catalog channel, the competition between the Internet channel and local stores is less intense than the competition between the catalog channel and local stores. The methods we introduce can be used to analyze cross-channel competition in other product categories, and suggest that managers need to take into account the types of products they sell when assessing competitive strategies.
Introduction Most individuals make healthcare visits before suicide, but many do not have a diagnosed mental health condition. This study seeks to investigate suicide risk among patients with a range of physical health conditions in a U.S. general population sample and whether risk persists after adjustment for mental health and substance use diagnoses. Methods This study included 2,674 individuals who died by suicide between 2000 and 2013 along with 267,400 controls matched on year and location in a case-control study conducted in 2016 across eight Mental Health Research Network healthcare systems. A total of 19 physical health conditions were identified using diagnostic codes within the healthcare systems' Virtual Data Warehouse, including electronic health record and insurance claims data, during the year before index date. Results Seventeen physical health conditions were associated with increased suicide risk after adjustment for age and sex (p<0.001); nine associations persisted after additional adjustment for mental health and substance use diagnoses. Three conditions had a >twofold increased suicide risk, including traumatic brain injury (AOR=8.80, p<0.001), sleep disorders, and HIV/AIDS. Multimorbidity was present in 38% of cases versus 15.5% of controls, and represented nearly a twofold increased risk for suicide. Conclusions Although several individual conditions, such as traumatic brain injury, were associated with high risk of suicide, nearly all physical health conditions increased suicide risk, even after adjustment for potential confounders. In addition, having multiple physical health conditions increased suicide risk substantially. These data support suicide prevention based on the overall burden of physical health.
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