The Low Price Behavior Analysis Of Online Bookstore In China Under The Network Effect

In recent years,along with the emergence of electronic business and the gradually recognization by people on online trading activities, the rapid development of the online bookstore causes more and more attention of consumeis, this is not only because of its more convenient and quick, variety, price cheap and personalized service characteristics,its more about the question produced by the whole society to the endless price wars.So what kind of business strategies do the businesses take in the price war without considering the cost?Whether the end result of the mad price war woill form exclusive monoply,and what kind of impact to the welfare of consumers produced by this kind of monopoly? Whether the press become the victims of the price war because of the price extrusion of online bookstores?What kind of attitude should the government take when face of all social questions? This paper in view of the above questions,bases on the netwotrk effect theory,to answer those questions by the analysis of the online bookstore market structure and its low price competitions.In this paper,through combining the theoretical analysis and empirical analysis to discuss the market structure and low price competition of online bookstore in our country. Firstly,this paper introduced the current situation of the online bookstore in our country briefly, to illustrate the types influence factors of it and maded the relevant maket definition, gived readers a good way to understand the research object of this paper.Secondly, by the analysis of the formation of the monopoly-competitive market constructure, and the possible influence whitch made in the low price competition,to find the theory and basic motivation about the reason why the businesses chose the low price competition.And then based on the fact of the actual situation of online bookstore in our country,to illustrate the objective cause of the price war. means of the price competition and the impossible impact could be made on the relations.In addition.this paper also briefly introduced the possible indirecte effects caused by the nonprice competitive strategy produced by online bookstores. Finally,about how the bookstore change the present situation looking the price war as the main competitive means, press’s relative strategies and the attitude of the government, this paper gave some constructive suggestions.Through the concrete analysis, we can draw the following conclusion:the market structure of online bookstore in our country is monoply competition structure, persuiting the maximum user scale under the action of the network effect,but due to the existence of the low barriers to entry and product homogenization, the fierce market competition forces high market share enterprise also to join the ranks of the price war.Only considering the influence of the price war to the price of books.the price war is beneficial to the increase of the consumer welfare.but in view of the whole influence of the price war to the online bookstore itself, press and so on. the result of the social welfare is uncertain.Thinking about the price war has its own theory basis and practical significance, this paper suggested to see the influence of the price war in different views.and try to achieve the effect of foster strengths and circumvent weaknesses.The innovation of this paper lies that don’t like the literature trying to explain the price war through studying the online bookstores" operation style and the contrast of the traditional bookstores.this paper try to identify the online bookstore market as the independent matket based on the network effect theory, by the analysis of the structure.conductive of the market and the related influence.to illustrate the basic reason and means of the price war, but to blame this competitive activities duing from the market characters.In view of the fact that the development of online bookstore market in our country still at the intial stage, the related research data is not very enough, reduced the limitation and the deficiency of this paper.