Optimally Informative Rankings and Consumer Search

Maarten Janssen, Cole Williams, Thomas Jungbauer and Marcel Preuss

No 20868, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper investigates the optimal information policy of an online platform (or multi-product firm) when ranking products in response to a consumer search query. The informativeness of rankings ranges from full information to full obfuscation, and consumers learn their match values with the products by engaging in costly sequential search. Invoking continuous match value distributions allows us to establish a novel result about consumer search. While consumers buy products with high match values and continue searching when they encounter low match values, they abort search without buying a product for intermediate ones. For a large class of distributions, the optimal strategy of a platform maximizing the probability of the consumer buying a product is to provide either full or no information at all. As a result, platform and consumer welfare are either fully aligned or at odds with each other.

Keywords: Learning (search for similar items in EconPapers)
JEL-codes: C72 D11 D21 D83 (search for similar items in EconPapers)
Date: 2025-11
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP20868 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:20868

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP20868

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().