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Integration and Search Engine Bias

Author

Listed:
  • Alexandre de Cornière
  • Greg Taylor

Abstract

Competition authorities all over the world worry that integration between search engines (mainly Google) and publishers could lead to abuses of dominant position. In particular, one concern is that of own-content bias, meaning that Google would bias its rankings in favor of the publishers it owns or has an interest in, to the detriment of competitors and users. In order to investigate this issue, we develop a theoretical framework in which the search engine (i) allocates users across publishers, and (ii) competes with publishers to attract advertisers. We show that the search engine is biased against publishers that display many ads - even without integration. Although integration may lead to own-content bias, it can also reduce bias by increasing the value of a marginal consumer to the search engine. Integration also has a positive effect on users by reducing the nuisance costs due to excessive advertising. Its net effect is therefore ambiguous in general, and we provide sufficient conditions for it to be desirable or not.

Suggested Citation

  • Alexandre de Cornière & Greg Taylor, 2013. "Integration and Search Engine Bias," Economics Series Working Papers 651, University of Oxford, Department of Economics.
  • Handle: RePEc:oxf:wpaper:651
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    File URL: http://www.economics.ox.ac.uk/materials/papers/12663/paper651.pdf
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    References listed on IDEAS

    as
    1. Susan Athey & Glenn Ellison, 2011. "Position Auctions with Consumer Search," The Quarterly Journal of Economics, Oxford University Press, vol. 126(3), pages 1213-1270.
    2. Attila Ambrus & Emilio Calvano & Markus Reisinger, 2016. "Either or Both Competition: A "Two-Sided" Theory of Advertising with Overlapping Viewerships," American Economic Journal: Microeconomics, American Economic Association, vol. 8(3), pages 189-222, August.
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Larbi Alaoui & Fabrizio Germano, 2012. "Time scarcity and the market for news," Economics Working Papers 1348, Department of Economics and Business, Universitat Pompeu Fabra, revised Sep 2014.
    2. Burguet, Roberto & Caminal, Ramon & Ellman, Matthew, 2015. "In Google we trust?," International Journal of Industrial Organization, Elsevier, vol. 39(C), pages 44-55.
    3. D'Annunzio, Anna & Russo, Antonio, 2015. "Net Neutrality and internet fragmentation: The role of online advertising," International Journal of Industrial Organization, Elsevier, vol. 43(C), pages 30-47.
    4. Walter Beckert & Kate Collyer, 2016. "Choice in the presence of experts: the role of general practitioners in patients' hospital choice," IFS Working Papers W16/21, Institute for Fiscal Studies.
    5. de Cornière, Alexandre & Taylor, Greg, 2016. "A Model of Biased Intermediation," CEPR Discussion Papers 11457, C.E.P.R. Discussion Papers.
    6. Fabrizio Germano & Francesco Sobbrio, 2016. "Opinion dynamics via search engines (and other algorithmic gatekeepers)," Economics Working Papers 1552, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2018.
    7. Mueller-Frank, Manuel & M. Pai, Mallesh, 2015. "Do Online Social Networks Increase Welfare?," IESE Research Papers D/1118, IESE Business School.
    8. Anna D'Annunzio & Antonio Russo, 2017. "Ad Networks, Consumer Tracking, and Privacy," CESifo Working Paper Series 6667, CESifo Group Munich.
    9. Alexandre de Cornière & Greg Taylor, 2014. "Quality Provision in the Presence of a Biased Intermediary," Working Papers 14-06, NET Institute.
    10. repec:bpj:rneart:v:15:y:2017:i:1:p:1-34:n:1 is not listed on IDEAS
    11. Liran Einav & Chiara Farronato & Jonathan Levin, 2015. "Peer-to-Peer Markets," NBER Working Papers 21496, National Bureau of Economic Research, Inc.
    12. Alexandre de Cornière, 2016. "Search Advertising," American Economic Journal: Microeconomics, American Economic Association, vol. 8(3), pages 156-188, August.
    13. Paul Belleflamme & Martin Peitz, 2018. "Inside the Engine Room of Digital Platforms: Reviews, Ratings, and Recommendations," Working Papers halshs-01714549, HAL.
    14. repec:eee:indorg:v:57:y:2018:i:c:p:255-277 is not listed on IDEAS
    15. Chen, Yongmin & Zhang, Tianle, 2016. "Intermediaries and Consumer Search," MPRA Paper 76051, University Library of Munich, Germany.
    16. Susan Athey & Emilio Calvano & Joshua Gans, 2013. "The Impact of the Internet on Advertising Markets for News Media," NBER Working Papers 19419, National Bureau of Economic Research, Inc.
    17. Susan Athey & Emilio Calvano & Joshua S. Gans, 2014. "The Impact of Consumer Multi-homing on Advertising Markets and Media Competition," CSEF Working Papers 379, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 27 Apr 2016.

    More about this item

    Keywords

    Search engine; integration; advertising;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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