Economics at your fingertips  

How Increasing Supplier Search Cost Can Increase Welfare

Zhiwen Li (), Michael Arnold () and Thierry Pénard ()
Additional contact information
Zhiwen Li: School of management Jiangsu University - JiangSu University

Post-Print from HAL

Abstract: Reductions in search costs are generally found to increase efficiency and welfare. Using a simple search model we show that when an upstream firm incurs a search cost to identify a potential trading partner and the two parties then negotiate the wholesale price, a reduction in search cost can actually reduce welfare. Furthermore, in a market driven by seller search, a search cost of zero is never socially optimal.

Keywords: social welfare; sequential search; Nash bargaining; search cost (search for similar items in EconPapers)
Date: 2017-12-20
Note: View the original document on HAL open archive server:
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Published in B.E. Journal in Theoretical Economics, Topics in Theoretical Economics, De Gruyter, 2017, 18 (1), review. ⟨10.1515/bejte-2016-0048⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: How Increasing Supplier Search Cost Can Increase Welfare (2018) Downloads
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:

DOI: 10.1515/bejte-2016-0048

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().

Page updated 2021-06-01
Handle: RePEc:hal:journl:halshs-01806502