Prominence and consumer search

Mark Armstrong (), John Vickers () and Jidong Zhou ()

RAND Journal of Economics, 2009, vol. 40, issue 2, pages 209-233

Abstract: This article examines the implications of prominence in search markets. We model prominence by supposing that the prominent firm will be sampled first by all consumers. If there are no systematic quality differences among firms, we find that the prominent firm will charge a lower price than its less prominent rivals. Making a firm prominent will typically lead to higher industry profit but lower consumer surplus and welfare. The model is extended by introducing heterogeneous product qualities, in which case the firm with the highest-quality product has the greatest incentive to become prominent, and making it prominent will boost industry profit, consumer surplus, and welfare. Copyright (c) 2009, RAND.

Date: 2009
View citations in EconPapers

Downloads: (external link)
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1756-2171.2009.00062.x link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Prominence and Consumer Search (2008)
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: http://EconPapers.repec.org/RePEc:bla:randje:v:40:y:2009:i:2:p:209-233

Ordering information: This journal article can be ordered from
http://www.blackwell ... al.asp?ref=0741-6261

Access Statistics for this article

RAND Journal of Economics is edited by James Hosek

More articles in RAND Journal of Economics from RAND Corporation
Series data maintained by Christopher F. Baum ().