An analysis of delivery service in electronic commerce

We discuss that the proliferation of new types of retailers such as Internet shopping malls, home shopping systems, which use telecommunication media as means of providing information of products, makes delivery service generally available. Then, we show that the delivery service can be used strategically for profit maximization by intentionally homogenizing consumers and, furthermore, social welfare generally increases by this delivery service unless the cost of delivery service is higher than that of all consumer groups.