Journal of International Information Management


During the e-Commerce boom of the late 1990s it was predicted that the Internet would have a significant impact on prices of various goods and services. Whether the net impact would he p ositive or negative was harder to forecast, there being opposing effects. We develop a model that describes some of those effects, including information asymmetry, search costs, price dispersion, trust premiums, and convenience premiums. The model is discussed, and a major portion is statistically tested with empirical data. As an exploratory gesture, the model is extended to consider product quality effects of online shopping. The final section concludes with direction for future research.