Pizza over the Internet: e-commerce, the fragmentation of activity and the tyranny of the region

Abstract

The question this paper explores is the extent to which e-commerce may be liberating consumers and merchants from the constraints of space (and time) that have traditionally led to predictable regional patterns of retail location. Is distance dead, have the laws of regional organization dissolved away in the age of Internet shopping? Following a discussion of some figures, trends and definitions relating to e-commerce, the paper develops a tentative theoretical framework for the study of this question. First, the fragmentation of activity hypothesis suggests that the activity of shopping can be decomposed into a large number of different sub-activities, some of which can better be carried out physically and others electronically from a variety of different locations. Next, noting that the sub-activity of paying for a purchase is the single most critical one for the survival of a local retail presence, a general game-theoretic model is outlined to help to estimate the relative amounts of physical vs. Internet shopping that would help to safeguard a healthy local retail presence. The paper concludes that e-commerce is not about to end the ‘tyranny of the region’. Regional structure principles remain important, although many familiar analytic approaches may have to be rethought or extended.

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