In Google we trust?
Ramon Caminal () and
Matthew Ellman ()
International Journal of Industrial Organization, 2015, vol. 39, issue C, 44-55
We examine the incentives of a monopolistic search engine, funded by advertising, to provide reliable search results. We distinguish two types of search results: sponsored and organic (not-paid-for). Organic results are most important in searches for online content, while sponsored results are more important in product searches. By modeling the underlying markets for online content and offline products, we can identify the sources of distortions for each type of result, and their interaction. This explicit treatment proves crucial for understanding, not only spillovers across markets, but also fundamental policy issues, such as the welfare effects of integration. In particular, integration of the engine with a small fraction of content providers is welfare-enhancing when incentives to distort are stronger for sponsored than organic search, but welfare-reducing in the opposite case.
Keywords: Search engine bias; Internet economics; Vertical integration; Two-sided markets; Antitrust (search for similar items in EconPapers)
JEL-codes: L13 L41 L82 L86 (search for similar items in EconPapers)
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Working Paper: In Google we trust? (2014)
Working Paper: In Google We Trust? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:39:y:2015:i:c:p:44-55
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