Ordered Search and Equilibrium Obfuscation

Chris M. Wilson

No 401, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: This paper demonstrates the incentives for an oligopolist to obfuscate by deliberately increasing the cost with which consumers can locate its product and price. Consumers are allowed to choose the optimal order in which to search firms and firms are able to influence this order through their choice of search costs and prices. Competition does not ensure market transparency - for a large range of parameters, equilibrium search costs are positive and asymmetric across firms. Intuitively, an obfuscating firm can soften the competition for consumers with low time costs by inducing the remaining consumers to optimally first search its rival.

Keywords: Search Costs; Search Order; Advertising (search for similar items in EconPapers)
JEL-codes: D43 D83 L13 (search for similar items in EconPapers)
Date: 2008-08-01
New Economics Papers: this item is included in nep-com
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Citations: View citations in EconPapers (7)

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Journal Article: Ordered search and equilibrium obfuscation (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:oxf:wpaper:401

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