Search Engine Competition

Daniel Garcia

No 10856, CESifo Working Paper Series from CESifo

Abstract: This paper studies a model of search engine competition with endogenous obfuscation. Platforms may differ in the quality of their search algorithms. I study the impact of this heterogeneity in consumer surplus, seller profits and platform revenue. I show that the dominant platform will typically induce higher prices but that consumers may benefit from asymmetries. I also show that enabling sellers to price-discriminate across platforms is pro-competitive. I then embed the static model in a dynamic setup, whereby past market shares lead to a better search algorithm. The dynamic consideration is pro-competitive but initial asymmetries are persistent.

Keywords: search engine; platform competition; consumer search (search for similar items in EconPapers)
JEL-codes: D43 D83 L13 M37 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-com, nep-ind, nep-mic, nep-pay and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_10856

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