Search costs in concentrated markets: An experimental analysis

Claudia Möllers, Torben Stühmeier and Tobias Wenzel
Authors registered in the RePEc Author Service: Torben Stuehmeier

No 233, DICE Discussion Papers from Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Abstract: This paper experimentally studies the role of search cost in duopoly markets where sellers may be able to coordinate pricing decisions. We vary the level of search cost and whether sellers can communicate. While we find that consumers are more likely to invest in search when cost is reduced, we find that a reduction of search cost does not influence prices. This effect is not influenced by the availability of seller communication. Our results suggest that policy interventions that aim to increase the competitiveness of markets via reducing search cost may not be effective in concentrated markets.

Keywords: Search; Collusion; Regulation (search for similar items in EconPapers)
JEL-codes: K23 L13 L51 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-com, nep-exp and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:233

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