ARTICLE

Volume 3,Issue 9

Cite this article
37
Citations
123
Views
26 September 2025

How E-commerce Benefits Consumers from an Economic Perspective

Yujia Zhai1 Jingyi Dong1
Show Less
1 University of Waterloo, Waterloo, ON N2L 3G1, Canada
EIR 2025 , 3(8), 233–240; https://doi.org/10.18063/EIR.v3i8.956
© 2025 by the Author. Licensee Whioce Publishing, Singapore. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution 4.0 International License ( https://creativecommons.org/licenses/by/4.0/ )
Abstract

A rise of e-commerce has a huge impaction on individuals’ consumption behaviors. Many factors may explain its influence, but the relative economic theory is significant to be aware of for a better development in terms of national well-being. We used equilibrium price, Network Effect and the Price Dispersion model to indicate how online stores may benefit consumers through their specific characters such as organized information and comparatively low prices. By comparing models given different variables (variables in each model differed based on its corresponded market) and sketching their relative distribution functions, we observed that when the number of informed consumers increases, more shops would choose to set relatively low prices for their selling goods given there are both online and offline stores in the market. In addition, by applying the price dispersion model, we notice consumers would be better off in general when there is an increased quantity of online stores in the market. We also found online retail market decreases individuals’ valuation of offline store products. Thus, online stores benefit consumers by providing various choices and cheap products, which the offline stores would also follow. In this condition, consumers in general would be benefits from the online store in both online and offline purchase channel, respectively.

Keywords
e-commerce
brick and mortar
equilibrium price
network effect
price dispersion model
informed consumers
valuation
retail market
References

[1] Perloff J M, Salop S, 1985, Equilibrium with product differentiation. Oxford University Press (OUP): Review of Economic Studies Jan: 3-8, 17-18.

[2] Effler P V, Bogard A K, Domen H Y, et al., 2002, Evaluation of eight rapid screening tests for acute leptospirosis in hawaii. #i{Journal of Clinical Microbiology, 40(4): 1464-1469.

[3] Goto K, Maki H, Kasai C, 2010, The Minimal English Test: a new method to measure English as a Second Language proficiency. Evaluation & Research in Education, 23(2): 91-104.

[4]  Rothschild R, 1997, Product differentiation and cartel stability: Chamberlin versus Hotelling. Annals of Regional Science, 31(3): 259-271.

[5] Parakhonyak A, 2016, “Showrooming in a market of tangible goods with Heterogeneous agents”, visited on August, 20, 2025, https://www.tse-fr.eu/fr/seminars/2017-showrooming-market-tangible-goods-heterogeneous-agents. 

[6] Straumann R, Graham, Mark. Geonet.oii.ox.ac.UK, Oxford Internet Institute,

University of Oxford (CC-BY-NC), vice.com, visited on August, 20, 2025, 

https://www.vice.com/en/article/jp5zgx/this-map-shows-the-countries-with-the-lowest-internet-penetration. 

Share
Back to top