Related papers: Greater search cost reduces prices
When customers must visit a seller to learn the valuation of its product, sellers potentially benefit from charging a lower price on the first visit and a higher price when a buyer returns. Armstrong and Zhou (2016) show that such price…
In the context of nonlinear prices, the empirical evidence suggests that the consumers have cognitive biases represented in a limited understanding of nonlinear price structures, and they respond to some alternative perceptions of the…
A seller offers a buyer a schedule of transfers and associated product qualities. After observing this schedule, the buyer chooses a flexible costly signal about his type. We show it is without loss to focus on a class of mechanisms that…
We consider sequential search by an agent who cannot observe the quality of goods but can acquire information by buying signals from a profit-maximizing principal with limited commitment power. The principal can charge higher prices for…
Search prominence may have a detrimental impact on a firm's profits in the presence of costly product returns. We analyze the impact of search prominence on firm profitability in a duopoly search model, considering the presence of costly…
Motivated by agentic markets -- two-sided markets in which consumers and businesses are assisted by AI tools that facilitate consumers' search -- we study the impact of improved search technology on learning and welfare in markets. We put…
In markets with search frictions, consumers can acquire information about goods either through costly search or from friends via word-of-mouth (WOM) communication. How do sellers' market power react to a very large increase in the number of…
E-Commerce challenges traditional approaches to assessing monopolistic practices due to the rapid rate of growth, rapid change in technology, difficulty in assessing market share for information products like web sites, and high degree of…
We study how market segmentation affects consumers when a monopolist can adjust both prices and product qualities across segments, engaging in second- and third-degree price discrimination simultaneously. We characterize the…
This paper proposes a theory of pricing premised upon the assumptions that customers dislike unfair prices---those marked up steeply over cost---and that firms take these concerns into account when setting prices. Since they do not observe…
Consider a customer who needs to fulfill a shopping list, and also a personal shopper who is willing to buy and resell to customers the goods in their shopping lists. It is in the personal shopper's best interest to find (shopping) routes…
We consider a model of oligopolistic competition in a market with search frictions, in which competing firms with products of unknown quality advertise how much information a consumer's visit will glean. In the unique symmetric equilibrium…
We present empirical evidence on the relationship between demand shocks and price changes, conditional on returns to scale. We find that in industries with decreasing returns to scale, demand increases (which raise costs) correspond to…
This paper investigates third-degree price discrimination under endogenous market segmentation. Segmenting a market requires access to information about consumers, and this information comes with a cost. I explore the trade-offs between the…
When online sellers use AI learning algorithms to automatically compete on e-commerce platforms, there is concern that they will learn to coordinate on higher than competitive prices. However, this concern was primarily raised in…
We consider the problem of a decision-maker searching for information on multiple alternatives when information is learned on all alternatives simultaneously. The decision-maker has a running cost of searching for information, and has to…
This paper examines the relationship between changes in telecommunications provider concentration on international long distance routes and changes in prices on those routes. Overall, decreased concentration is associated with significantly…
We study a model of competitive information design in an oligopoly search market with heterogeneous consumer search costs. A unique class of equilibria -- upper-censorship equilibria -- emerges under intense competition. In equilibrium,…
Consumers value keeping some information about them private from potential marketers. E-commerce dramatically increases the potential for marketers to accumulate otherwise private information about potential customers. Online marketers…
The paper explores a consumer search setting where the sellers have asymmetries. The model is an extension of the popular Stahl Model, which is widely used in the literature. The extension introduces sellers with heterogeneous stores…