Optimal Information Structures for the Seller of a Search Good

Terence Barron and A. N. Saharia
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Terence Barron: William E. Simon Graduate School of Business Administration, University of Rochester, Rochester, New York 14627
A. N. Saharia: School and Graduate School of Business Administration, University of Washington, DJ 10, Seattle, Washington 98195

Information Systems Research, 1990, vol. 1, issue 2, 188-204

Abstract: This paper examines an information system design problem faced by the seller of a search good who sells his product in a competitive market to well-informed consumers. The formulation results in a nonlinear optimization problem having a special structure which can be exploited in solving the first-order conditions. Closed-form solutions and comparative statics results are given in the case of a uniformly-distributed attribute, and we provide a numerical example in the case of a normally-distributed attribute.

Keywords: economics of information systems; design of information systems; design of information structures; information economics; optimal measurement (search for similar items in EconPapers)
Date: 1990
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Persistent link: https://EconPapers.repec.org/RePEc:inm:orisre:v:1:y:1990:i:2:p:188-204

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