Market transparency and consumer search—Evidence from the German retail gasoline market

Simon Martin

RAND Journal of Economics, 2024, vol. 55, issue 4, 573-602

Abstract: We estimate a model of incomplete information price competition where consumers endogenously choose whether to use a price search website. We examine how consumer search and prices would change under different transparency regimes. We find that aggregate consumer welfare is maximized when the price search website lists the lowest 20% of prices (i.e., one station in markets with less than five stations, and two stations in markets with more than five stations), with consumer expenditures falling by 1.5% relative to a regime where all are listed.

Date: 2024
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https://doi.org/10.1111/1756-2171.12485

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Persistent link: https://EconPapers.repec.org/RePEc:bla:randje:v:55:y:2024:i:4:p:573-602

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