Chapter in NBER book: Adam B. Jaffe, Josh Lerner and Scott Stern (eds.), Innovation policy and the economy, volume 6, pages 67-90., Author examines sources of consumer surplus that are likely to exist due to the types of sites being used online and points to research that quantifies the consumer gains from use of the Internet. ... Reports that the Internet increases price competition so that consumers pay less for products and improves daily life by increasing the variety, quality and availability of products and information. These gains are particularly useful to people with high transactions costs (busy, rural) and uninformed people. By allowing consumers in rural or sparsely populated areas to share tastes which might be rare in the local population, it particularly benefits consumers who might have more difficulty physically interacting with people of their tastes.
