Ordered Consumer Search
Mark Armstrong ()
No 11566, CEPR Discussion Papers from C.E.P.R. Discussion Papers
The paper discusses situations in which consumers search through their options in a deliberate order, in contrast to more familiar models with random search. Topics include: the existence of ordered search equilibria with symmetric sellers (all consumers first inspect the seller they anticipate sets the lowest price, and a seller which is inspected first by consumers will set the lowest price); the use of price and non-price advertising to direct search; the impact of consumers starting a new search at their previous supplier; and the incentive a seller can have to raise its own search cost. I also show how ordered search can be reformulated as a simpler discrete choice problem without search frictions or dynamic decision making.
Keywords: advertising; consumer search; directed search; discrete choice; obfuscation; oligopoly; ordered search; sequential search (search for similar items in EconPapers)
JEL-codes: D21 D43 D83 L11 L15 M37 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-dcm, nep-mic and nep-mkt
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Journal Article: Ordered Consumer Search (2017)
Working Paper: Ordered Consumer Search (2016)
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