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Integration and Search Engine Bias

  • Alexandre de Cornière
  • Greg Taylor

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.

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File URL: http://www.economics.ox.ac.uk/materials/papers/12663/paper651.pdf
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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 651.

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Date of creation: 26 Mar 2013
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Handle: RePEc:oxf:wpaper:651
Contact details of provider: Postal: Manor Rd. Building, Oxford, OX1 3UQ
Web page: http://www.economics.ox.ac.uk/
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  1. Varian, Hal R., 2007. "Position auctions," International Journal of Industrial Organization, Elsevier, vol. 25(6), pages 1163-1178, December.
  2. Susan Athey & Glenn Ellison, 2009. "Position Auctions with Consumer Search," NBER Working Papers 15253, National Bureau of Economic Research, Inc.
  3. Simon P. Anderson & Stephen Coate, 2005. "Market Provision of Broadcasting: A Welfare Analysis," Review of Economic Studies, Oxford University Press, vol. 72(4), pages 947-972.
  4. Reisinger, Markus & Ambrus, Attila & Calvano, Emilio, 2013. "Either or Both Competition: A "Two-Sided" Theory of Advertising with Overlapping Viewerships," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79912, Verein für Socialpolitik / German Economic Association.
  5. White, Alexander, 2013. "Search engines: Left side quality versus right side profits," International Journal of Industrial Organization, Elsevier, vol. 31(6), pages 690-701.
  6. Jay Pil Choi & Byung-Cheol Kim, 2008. "Net Neutrality and Investment Incentives," CESifo Working Paper Series 2390, CESifo Group Munich.
  7. Andrei Hagiu & Bruno Jullien, 2011. "Why do intermediaries divert search?," RAND Journal of Economics, RAND Corporation, vol. 42(2), pages 337-362, 06.
  8. Matthew Ellman & Fabrizio Germano, 2009. "What do the Papers Sell? A Model of Advertising and Media Bias," Economic Journal, Royal Economic Society, vol. 119(537), pages 680-704, 04.
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