Do Lower Search Costs Reduce Prices and Price Dispersion?
AbstractThis paper presents a search model, for which a decrease in the search cost may lead to lower prices and to a lower price variance, but may also lead to the opposite. This result contrasts with some predictions about the impact of the Internet on prices, but fits well with the empirical literature on e-commerce.
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Bibliographic InfoPaper provided by Portuguese Competition Authority in its series Working Papers with number 04.
Length: 14 pages
Date of creation: Sep 2004
Date of revision:
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Search; Price Levels; Price Dispersion;
Other versions of this item:
- Pereira, Pedro, 2005. "Do lower search costs reduce prices and price dispersion?," Information Economics and Policy, Elsevier, vol. 17(1), pages 61-72, January.
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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