Multiproduct search

Jidong Zhou ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper presents a sequential search model where consumers look for several products among competitive multiproduct �rms. In a multiproduct search mar- ket, both consumer behavior and �rm behavior exhibit di¤erent features from the single-product case: a consumer often returns to previously visited �rms before running out of options; and prices can decrease with search costs and increase with the number of �rms. The framework is then extended in two directions. First, by introducing both single-product and multiproduct searchers, the model can explain the phenomenon of countercyclical pricing, i.e., prices of many retail products decline during peak-demand periods. Second, by allowing �rms to use bundling strategies, the model sheds new light on how bundling a¤ects market performance. In a search environment, bundling tends to reduce consumer search intensity, which can soften competition and reverse the usual welfare assessment of competitive bundling in a perfect information setting.

Keywords: consumer search; oligopoly; multiproduct pricing; countercyclical pricing; bundling (search for similar items in EconPapers)
JEL-codes: D11 D43 D83 L13 (search for similar items in EconPapers)
Date: 2011-11-30
New Economics Papers: this item is included in nep-com, nep-mic and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/37139/1/MPRA_paper_37139.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/41702/1/MPRA_paper_41702.pdf revised version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:37139

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().