In reply to DubyaJamesDubya:
But then it's only worth it because that's how we do it. The question should how much value is it adding to our lives above what we had before. If all high street shopping is removed by the internet shops undercutting, what's to stop prices rising once the competition has gone?
I am not sure what question you are trying to answer, but a few comments:
- barriers to entry for internet shopping are lower than they are for high street shopping. So competitive pressure will remain. [there are issues on asymmetric taxing regimes, just like there are on VAT vs income tax vs capital gains, but that is not an internet question]
- not all shopping can be bought at an internet shop
- shopping is a rounding error on the value add of the 'internet'
I am happy to waffle/pontificate on this for days [which might be why no one ever sits next to me twice at dinner parties], but if you are interested, perhaps set out what you are trying to understand? Or is this part of a homework assignment?