Trade and shopping

Trade and shopping
Eric Schmidt, a former CEO of Google, said in 2012 that the web will dissolve national barriers. While we wait to see what is going to be left of national borders in the future, the rising importance of e-commerce can already help economists understand the nature of frictions in international trade.
Online markets have unique qualities. For example, the physical cost of changing prices is negligible for internet retailers, and therefore internet prices could be fluctuating every week, day or minute in response to shifting demand and supply conditions. Searching for best online prices for very narrowly defined goods is particularly cheap and simple as consumers do not need to travel anywhere, buyers can establish the distribution of prices with just a few clicks, and pressure for price convergence is especially strong with ubiquitous price comparison websites. More generally, the geographical location of consumers and stores is largely irrelevant in e-commerce, and therefore administrative borders and similar frictions are likely to play a much more limited role.
Strikingly, while the law of one price is an appealing concept, the vast majority of research has emphasized frictions that prevent the law from holding over relative long periods. These frictions can take a variety of forms, but the most popular barriers leading to violations of the law are search costs, costs of nominal price adjustment and transportation costs. Assessing the contribution of these frictions has been remarkably difficult as they are ubiquitous in standard markets with brick-and-mortar shops.


New evidence for frictions and price adjustment in online markets
Fortunately, in a highly integrated market with low frictions of price adjustment, easy search and price comparisons, and limited influence of geographical barriers, you can rule out some popular explanations of the puzzle and narrow down the set of plausible theories. In our recent paper, we use internet prices in the US and Canada for a broad array of products to provide new evidence on the nature and sources of frictions in price adjustment and departures from the law of one price.


For almost five years (2008-13) we scraped prices and other relevant information from a leading price-comparison website. The data includes each good’s unique identifier (similar to barcodes in the scanner price data), each good’s description, prices for each seller, each seller’s unique identifier, the number of seller reviews, the ranking of seller quality, reviews of goods, etc. The dataset covers a broad range of goods sold online, including software, computer parts, electronics and others. We have collected information for more than 140,000 goods and more than 11 million price quotes.
Shopping always has been associated with long, dragging lines, parking issues, and the hassle of driving around from store to store until we finally find what we need; but not anymore. Online shopping has given people the freedom to shop at home wearing only their pajamas and still get what they want. Although this might seem like the answer to prayers of many people, online shopping has its flaws as does traditional shopping. To facilitate this decision we have to see if online shopping can measure up to the purchasing power of traditional shopping. To do this we need to weigh both methods to see how they compare to one another. Online and traditional shopping offer choices to shoppers; knowing the risks and benefits of both alternatives is necessary for them to make a smart decision. Online Shopping: 🤔 Need an excellent Essay 🤩 Compose bold, clear, mistake-free Essay with our writing service. ⭐⭐⭐⭐⭐ Over 100,000 grateful students ✔️ Plagiarism-free papers ✔️ Money back guarantee ✔️ Guaranteed anonymity ✔️ Free revisions When it comes to online shopping the idea of shopping in the comfort of your own home is very appealing to most people. You also have the choice of browsing different sites to find what you need instead of wasting gas and time driving around different stores. Also, many people dread standing in long lines especially during the holiday season. Online shopping offers a retreat from these situations. Another good thing about online shopping is that things are easy to find online. You just type whatever it is your looking for on a search engine and you will get many suggestions of sites on the item. And perhaps the best feature of all is the price reduction offered by the online option. The reason for this is because taxes seem to be lower or nonexistent on some products in some states when shopping online. Online shopping also prevents consumers from walking around with a big wad of money that can be easily lost or stolen. 2 pages, 615 words The Essay on Shopping Online The graph which we collect data from question 5 gives information about the proportion of the extent of HSU students doing shopping online. An important point to mention is that the number of students do shopping online are not frequently. As a general trend, 55% of students buy products online on special occassions or holidays. In addition, the rate of student shop online in weekly is less than ... The flaws of online shopping usually come between the reliability of the websites, the risk of identity theft, and the risk of credit card fraud committed by computer hackers. There is also a risk of running into a website that can infect your computer with various kinds of viruses. Reading online reviews about certain websites can sometimes help in this matter. Quality is sometimes an issue with online shopping because you don’t physically see or try out the product before you make the purchase. That is a huge turn off for most people because research has shown that motor skills are very important when it comes to activities such as shopping and people just plain and simple want to see and test out what they are purchasing. For example, ladies want to test out the new perfumes but cannot do that through the computer. Sometimes there are certain items people like to try out and physically see what it looks like on them, but obviously they can’t do that online. Another disadvantage to online shopping is the fact that you have to wait to receive your item. So, if you are in a rush then you are out of luck. This probably means that grocery shopping online is not a good idea. Method of payment is another risk by itself. Usually credit cards are the preferred method but sometime you can use PayPal. But, it is risky to use credit cards online because you don’t know who is looking at your information. With that being said, it is probably a good idea to make sure you are using a good anti-virus program before going on a shopping spree online. Traditional Shopping: In traditional shopping you simply get in your car, drive to your favorite store (possibly with a friend with you) and buy what you want. It is an opportunity to socialize as well as having the excitement of being in a store with millions of products which you can see and try before you purchase. This method allows you to get the item right now without having to worry about the product being lost in the mail. Also, if you don’t like something or if something doesn’t fit you can just simply take it back to the store and get a refund or your money back instantly rather than waiting for the postal service. Conventional shopping has a certain vibe or electricity to it which is hard to experience from a computer. Traditional shopping sounds great; however it does have its issues.