Internet Car Retailing, Journal of Industrial Economics
We investigate the effect of Internet car referral services on dealer pricing of automobiles in California. Customers of an online service pay on average 2% less for their car ($450 for the average car). 25% of the savings come from purchasing at low-price dealerships affiliated with the online service. The remaining 75% stem from information provision by the online service, bargaining by the service on behalf of consumers, and cost efficiencies. A consumer receiving the mean online price does better than 65% of offline consumers, conditional on the car being purchased.
Florian Zettelmeyer, FionaScott Morton, Jorge Silva-Risso
Zettelmeyer, Florian, FionaScott Morton, and Jorge Silva-Risso. 2001. Internet Car Retailing. Journal of Industrial Economics. 49(4): 501-519.