Although electronic commerce is currently a relatively small fraction of overall sales, the dollar amounts are significant and growing rapidly. Future growth, however, is likely to be limited by two factors - technical barriers and issues of trust and risk. Technical barriers such as delivery,...

We develop a model of pricing and advertising for e-commerce. N identical sellers, selling an homogeneous product, each choose a price and a web-based advertising policy. Buyers have usual demand functions and search optimally on the Internet. A Symmetric Nash Equilibrium (SNE) is derived and...