Search, Showrooming, and Retailer Variety

Heski Bar-Isaac and Sandro Shelegia

No 15448, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Pricing depends on the selection of consumers and the way that they search. Diamond (1971) highlights that consumers who search for prices, paradoxically, impose no discipline on prices. Instead, searching for match information does. Showrooming disciplines prices at deep stores (where consumers can learn about many goods in a category). It also leads shallow stores, where showroomers buy, to face a larger fraction of consumers who are insensitive to price. The overall effect of more showrooming can be to raise or lower prices. It depends on the kinds of consumers who showroom. Similarly, a price-only channel can have ambiguous effects.

Keywords: Consumer search; Pricing; Retailer variety; Showrooming (search for similar items in EconPapers)
JEL-codes: D83 L11 L14 (search for similar items in EconPapers)
Date: 2022-05
New Economics Papers: this item is included in nep-com and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Journal Article: Search, Showrooming, and Retailer Variety (2023)
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