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Improved Information in Search Markets

Jidong Zhou

MPRA Paper from University Library of Munich, Germany

Abstract: This paper studies how an improved information environment affects consumer search and firm competition. We find conditions for information improvement to have unambiguous impacts on search duration, price, and consumer welfare. In many cases consumers benefit from information improvement regardless of how it affects the market price, but there are also cases where information improvement raises price significantly so that consumers suffer from it. Our model provides a unified way to consider the market implications of various types of information improvement such as search advertising, personalized recommendation, filtering, and new display technology.

Keywords: consumer search; price competition; information improvement (search for similar items in EconPapers)
JEL-codes: D43 D83 L13 (search for similar items in EconPapers)
Date: 2020-05-19
New Economics Papers: this item is included in nep-com, nep-mic and nep-ore
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:100509

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