Economics at your fingertips  

Information Gatekeepers on the Internet and the Competitiveness of Homogeneous Product Markets

Michael Baye and John Morgan

American Economic Review, 2001, vol. 91, issue 3, 454-474

Abstract: We examine the equilibrium interaction between a market for price information (controlled by a gatekeeper) and the homogenous product market it serves. The gatekeeper charges fees to firms that advertise prices on its Internet site and to consumers who access the list of advertised prices. Gatekeeper profits are maximized in an equilibrium where (a) the product market exhibits price dispersion; (b) access fees are sufficiently low that all consumers subscribe; (c) advertising fees exceed socially optimal levels, thus inducing partial firm participation; and (d) advertised prices are below unadvertised prices. Introducing the market for information has ambiguous social welfare effects.

JEL-codes: D83 L11 L86 (search for similar items in EconPapers)
Date: 2001
Note: DOI: 10.1257/aer.91.3.454
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (356) Track citations by RSS feed

Downloads: (external link) (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

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:

Ordering information: This journal article can be ordered from

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

Page updated 2022-09-28
Handle: RePEc:aea:aecrev:v:91:y:2001:i:3:p:454-474