IDEAS home Printed from https://ideas.repec.org/a/bpj/bejeap/v20y2020i2p7n10.html
   My bibliography  Save this article

Search and Bidding Costs

Author

Listed:
  • Miao Chun-Hui

    (Department of Economics, University of South Carolina, 1014 Greene St., Columbia, SC 29208, USA)

Abstract

This paper studies consumer search behavior in markets where sellers must incur fixed costs to win a contract. We show that consumers face a commitment problem if their search intensities are not observed by sellers. Welfare is maximized when consumers can precommit to a limited number of searches, but in the absence of the ability to commit, consumers search more than the optimum. A decline in search costs can exacerbate the commitment problem and leave consumers potentially worse off.

Suggested Citation

  • Miao Chun-Hui, 2020. "Search and Bidding Costs," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(2), pages 1-7, April.
  • Handle: RePEc:bpj:bejeap:v:20:y:2020:i:2:p:7:n:10
    DOI: 10.1515/bejeap-2019-0143
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/bejeap-2019-0143
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    File URL: https://libkey.io/10.1515/bejeap-2019-0143?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Bertrand competition; bidding cost; price dispersion; search cost;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L00 - Industrial Organization - - General - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejeap:v:20:y:2020:i:2:p:7:n:10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.