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Improved Information in Search Markets

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  • Zhou, Jidong

Abstract

This paper studies how an improved information environment affects consumer search and firm competition. We find conditions for information improvement to have unambiguous impacts on search duration, price, and consumer welfare. In many cases consumers benefit from information improvement regardless of how it affects the market price, but there are also cases where information improvement raises price significantly so that consumers suffer from it. Our model provides a unified way to consider the market implications of various types of information improvement such as search advertising, personalized recommendation, filtering, and new display technology.

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  • Zhou, Jidong, 2020. "Improved Information in Search Markets," MPRA Paper 100509, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:100509
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    Cited by:

    1. Liu, Lin & Wang, X. Henry, 2021. "Product differentiation and equilibrium price with partial product search," Economics Letters, Elsevier, vol. 205(C).
    2. Chen, Yongmin, 2023. "Search and Competition Under Product Quality Uncertainty," MPRA Paper 116609, University Library of Munich, Germany.
    3. Moraga-González, José-Luis & Sun, Yajie, 2022. "Product Quality and Consumer Search," CEPR Discussion Papers 14669, C.E.P.R. Discussion Papers.
    4. Mark Whitmeyer, 2020. "Persuasion Produces the (Diamond) Paradox," Papers 2011.13900, arXiv.org, revised Apr 2021.

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    More about this item

    Keywords

    consumer search; price competition; information improvement;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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