Abstract

Many traditional monopoly industries are pervaded by the external e-commerce in recent years. It is therefore important to address the internet in these special industries. We establish a model under the monopoly with the external e-commerce and the corresponding properties are achieved. This paper shows that it is advantageous for the e-commerce if there are more consumers with internet prone. The effects of the change of the market size are also discussed and we find that this change has more effects on the offline sales. In essence, we characterize the e-commerce with the industrial organization theory in this work.

Key words: Monopoly, Industrial organization, e-commerce, game theory.

Abbreviation

JEL: C61, D42, L11, L81