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Consumer search and optimal information

Author

Listed:
  • Mustafa Dogan
  • Ju Hu

Abstract

This article studies an information design problem in a sequential consumer search environment. Consumers, whose valuation of firms' products is uncertain, observe a noisy signal about the valuation upon being matched with a firm. The goal is to characterize those signal structures that maximize consumer surplus. We show that the consumer‐optimal signal structure can be found within the class of conditional unit‐elastic demand signal distributions. A rich set of properties and comparative statics of the consumer‐optimal signal distributions are also derived.

Suggested Citation

  • Mustafa Dogan & Ju Hu, 2022. "Consumer search and optimal information," RAND Journal of Economics, RAND Corporation, vol. 53(2), pages 386-403, June.
    • Handle: RePEc:bla:randje:v:53:y:2022:i:2:p:386-403
    DOI: 10.1111/1756-2171.12411
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Teddy Mekonnen & Bobak Pakzad-Hurson, 2024. "Competition, Persuasion, and Search," Papers 2411.11183, arXiv.org, revised May 2026.
    2. Mekonnen, Teddy, 0. "How to segment a search market: information design and directed search," Theoretical Economics, Econometric Society.
    3. Teddy Mekonnen & Zeky Murra-Anton & Bobak Pakzad-Hurson, 2025. "Persuaded Search," Journal of Political Economy, University of Chicago Press, vol. 133(10), pages 3167-3207.
      • Teddy Mekonnen & Zeky Murra-Anton & Bobak Pakzad-Hurson, 2023. "Persuaded Search," Papers 2303.13409, arXiv.org, revised Aug 2024.
    4. Brian C. Albrecht & Mark Whitmeyer, 2023. "Comparison Shopping: Learning Before Buying From Duopolists," Papers 2302.06580, arXiv.org, revised Apr 2023.
    5. Liang Guo, 2025. "Designing Information to Engage Customers," Management Science, INFORMS, vol. 71(10), pages 8169-8187, October.
    6. Raphael Boleslavsky & Silvana Krasteva, 2025. "Limits of Disclosure in Search Markets," Papers 2506.06319, arXiv.org, revised Jun 2025.
    7. Pak Hung Au & Mark Whitmeyer, 2024. "Attraction Via Prices and Information," Papers 2402.11754, arXiv.org.
    8. Dongjin Hwang & Ilwoo Hwang, 2025. "Competitive Information Disclosure with Heterogeneous Consumer Search," Papers 2504.04659, arXiv.org, revised Jul 2025.
    9. Sato, Hiroto & Shirakawa, Ryo, 2025. "Information structures in college admissions," Journal of Economic Behavior & Organization, Elsevier, vol. 240(C).
    10. Lyu, Chen, 2023. "Information design for selling search goods and the effect of competition," Journal of Economic Theory, Elsevier, vol. 213(C).
    11. Yongmin Chen, 2024. "Search and Competition Under Product Quality Uncertainty," Journal of Industrial Economics, Wiley Blackwell, vol. 72(2), pages 633-661, June.

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