The Hindu Business Line : <I>`Net is used more for searching than buying' </I>

Autobytel Inc (www.autobytel.com) is an Internet automotive marketing services company. It helps "retailers sell cars and manufacturers build brands through marketing, advertising, data and CRM products and programs," as the site informs. "Every 7.5 seconds an American car shopper requests a vehicle through Autobytel," one learns.

Does the Net help lower car prices? On this, www.ssrn.com has a paper titled Cowboys or Cowards: Why are Internet Car Prices Lower? by Florian Zettelmeyer et al. The authors use `a large dataset of transaction prices for new automobiles and referral data from Autobytel.com' and discover that online consumers paid on average 1.2 per cent less than offline consumers did. The annual saving is estimated to be $240 million per year, implying that the Net facilitates `a large transfer of surplus to Internet consumers'.

How does online buying fare in India? There may be answers from the online research and advisory, www.juxtconsult.com, which has a feature titled `India Online 2005'. Insights displayed on the site are that 17.5 million urban Indians use the Net, and that the typical Net user is not a tech-savvy professional but an average person. "Juxtconsult's survey found that 40 per cent of all urban Internet users buy online, while 42 per cent of the sales originate through just 5 per cent of consumers," reports www.ecommerce-guide.com.

Cars aren't top on our online buy list. At rank one are books and CDs, making up nearly a fourth of all online purchases. The Net is used `more for searching than buying products and services,' observed Juxtconsult.

Tax makes geography relevant to cyberspace

Glenn and Sara Ellison of MIT have written a paper titled Internet Retail Demand: Taxes, Geography, and Online-Offline Competition.

They explain their methodology this way: "Let Nsht be the number of consumers in state s purchasing a particular type of memory module in hour h of day t from the twenty-four (or twelve for 256MB modules) Web sites whose prices we observe." The authors carry out price estimation four times "to obtain independent estimates using data on each of the four products: 128MB PC100 modules, 128MB PC133 modules, 256MB PC100 modules, and 256MB PC133 modules."

Sales taxes are `an important driver of e-retail activity," notes the conclusion. Interestingly, "consumers have a preference for buying from in-state e-retailers."

A world where consumers care about purchasing from their home state could lead to a less concentrated e-retail sector with many small firms, observe the Ellisons. In contrast, "a world where consumers do not have a home-state preference but do care about shipping times could lead to a sector dominated by a few large firms that effectively use distributed warehouses to minimise both shipping times and sales tax liabilities."

The taxman may, after all, make geography relevant for cyberspace, too. The paper's findings are particularly relevant for the big retail players waiting in the wings.

Contrived experiments and circumstances

Prowling on the Net about research about the Net, you'd stumble upon Internet stings directed at pedophiles: a study in philosophy and law, a recent research paper by Joseph S. Fulda.

"In the simplest case of a sting operation, an undercover detective pretends to be blind or frail and elderly, and goes on a walk in a rough neighbourhood. He is then attacked by thugs seeking easy prey," reads situation A in the paper. In this, the anticlimax is that the waiting cops arrest the thugs.

In situation B, "a serial rapist is stalking a neighbourhood and a policewoman meeting the description of the sort of woman he is wont to attack (or dressed and made up to meet that description) goes out and about in the vicinity where he is next expected to strike, and he accosts her." Then, you know what happens.

But situation C is ghastly. "Under newly granted (or simply newly claimed) powers of Internet surveillance, undercover officers scan e-mails for angry confidences that contain a remark to the effect that someone would like to kill someone else. They then send them an e-mail advertising a `black box,' which when a `red button' that sits atop the box is pushed causes remote explosions at addresses typed in for, say, $10." Wonder if you've ever heard of such a thing?

Would anyone want to press a button and kill? Yes! "It is discovered that 10 per cent of recipients of that e-mail naïvely pay the $10 using a credit card and when the black box arrives in the mail a few days later they type the address of the person they wish to eliminate, and sometimes others as well, and then push the red button."

Boom! No, "on pushing the red button, no explosion occurs," thankfully. "Rather, the data (addresses) they have typed in are transmitted to the police." Now the question is, "Have they committed attempted murder? And, if they have, were they sufficiently predisposed to do so?"

In `conclusion', the author says that thoughtful people should refocus their efforts away from the rather neutral Internet. He reasons thus: "For the fifteen-year-old girl (or boy) who actually wants sexual contact with a fifty-something, the Internet is largely irrelevant. Any such minor can accomplish her or his `mission' in under fifteen minutes in the clubs and bars of any large city. But their parents know that." Please note that the paper paints the US context, which may not yet be relevant closer home. (Or, is it?)

What has occurred, and what has most certainly contributed to the general panic, as Fulda sees it is `a one-time generational knowledge reversal'. What's that? Earlier, "The virtual streets of cyberspace were very well-known to minors, but hardly at all to their parents." Not so now. "Today's new parents are not in the historically unusual position of knowing less about the world (and its dangers) than their children will be." Parental paranoia!

Citing the view of Peter Vranas, that most of what we call character is, in fact, circumstance, Fulda declares: "To judge people based on contrived experiments and artificially created circumstances, psychological or legal, is deeply and fundamentally illiberal."

Would you agree with such a liberal view?

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