Every new method of trade offers an opportunity for economic agents to compare its costs and benefits relative to the status quo. Such comparison motivates sorting across market segments and reshapes the whole marketplace. The Internet provides an excellent example: it introduces substantial search cost savings over brick and mortar retail stores but imposes new obstacles for sellers to convey quality.
Dividing Online and Offline: A Case StudyGinger Jin and Andrew Kato ,
3( 74 )
Review of Economic Studies