Economic models of price competition between traditional and online retailing under showrooming

Showrooming is a phenomenon when customer views product at physical store, but buys it online from the same store’s website or competitor’s website. In this paper, we develop economic models of price competition between traditional retailer and an under showrooming behaviour. Our results indicate that hurts benefits in terms sales volumes profits. The combined offline market expands showrooming. We consider two strategies—effort/investment made entry by retailer—to counter Either strategy makes better off, worse profits; also, overall market, including sales, contracts. Moreover, entry, although its decrease, total increase; contracts, increase. scenarios simultaneous sequential moves retailers to set their prices. observe both benefit than move; however, demand lower move. have also conducted sensitivity analyses check for robustness results. conclude paper highlighting managerial implications research providing possible directions future research.