Bias and Size Effects of Price-Comparison Search Engines: Theory and Experimental Evidence
This article, analyzes the impact on consumer prices of the size and bias of price comparison search engines. we develop a model, related to Burdett and Judd (1983) and Varian (1980), and test experimentally several theoretical predictions. The experimental results confirm the model’s predictions regarding the impact of the number of firms, and the type of bias of the search engine, but reject the model’s predictions regarding changes in the size of the index.
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