Related papers: Greater search cost reduces prices
In markets where algorithmic data processing is increasingly prevalent, recommendation algorithms can substantially affect trade and welfare. We consider a setting in which an algorithm recommends a product based on its value to the buyer…
Good economic mechanisms depend on the preferences of participants in the mechanism. For example, the revenue-optimal auction for selling an item is parameterized by a reserve price, and the appropriate reserve price depends on how much the…
Data buyers compete in a game of incomplete information about which a single data seller owns some payoff-relevant information. The seller faces a joint information- and mechanism-design problem: deciding which information to sell, while…
In various markets where sellers compete in price, price oscillations are observed rather than convergence to equilibrium. Such fluctuations have been empirically observed in the retail market for gasoline, in airline pricing and in the…
Consider a list of $n$ files whose popularities are random. These files are updated according to the move-to-front rule and we consider the induced Markov chain at equilibrium. We give the exact limiting distribution of the search-cost per…
We examine the implications of consumer privacy when preferences today depend upon past consumption choices, and consumers shop from different sellers in each period. Although consumers are ex ante identical, their initial consumption…
This paper develops algorithms to solve strong-substitutes product-mix auctions. That is, it finds competitive equilibrium prices and quantities for agents who use this auction's bidding language to truthfully express their…
In economics, there are many ways to describe the interaction between a "seller" and a "buyer". The most common one, with which we interact almost every day, is selling for a fixed price. This option is perfect for selling a mass product,…
This contribution is concerned with price optimisation of the new business for a non-life product. Due to high competition in the insurance market, non-life insurers are interested in increasing their conversion rates on new business based…
I characterize optimal government policy in a sticky-price economy with different types of consumers and endogenous financial constraints in the banking and entrepreneurial sectors. The competitive equilibrium allocation is constrained…
The ability to make international roaming calls is of increasing importance to customers in Europe. This contrasts with various complaints that retail prices of roaming calls are rigid and excessive. The focus if the paper is on wholesale…
We consider the problem of searching for an object on a line at an unknown distance OPT from the original position of the searcher, in the presence of a cost of d for each time the searcher changes direction. This is a generalization of the…
We study competition between firms that contract with consumers before the consumers fully learn their product preferences. In a Hotelling duopoly, firms screen consumers by offering menus of option contracts. We characterize the unique…
This paper investigates the impacts of competition in autonomous mobility-on-demand systems. By adopting a network-flow based formulation, we first determine the optimal strategies of profit-maximizing platform operators in monopoly and…
In an electric power system, demand fluctuations may result in significant ancillary cost to suppliers. Furthermore, in the near future, deep penetration of volatile renewable electricity generation is expected to exacerbate the variability…
We consider the "Offline Ad Slot Scheduling" problem, where advertisers must be scheduled to "sponsored search" slots during a given period of time. Advertisers specify a budget constraint, as well as a maximum cost per click, and may not…
We study how loyalty behavior of customers and differing costs to produce undifferentiated products by firms can influence market outcomes. In prior works that study such markets, firm costs have generally been assumed negligible or equal,…
Internet search companies sell advertisement slots based on users' search queries via an auction. While there has been a lot of attention on the auction process and its game-theoretic aspects, our focus is on the advertisers. In particular,…
We analyze the revenue loss due to market shrinkage. Specifically, consider a simple market with one item for sale and $n$ bidders whose values are drawn from some joint distribution. Suppose that the market shrinks as a single bidder…
In the mobile communication services, users wish to subscribe to high quality service with a low price level, which leads to competition between mobile network operators (MNOs). The MNOs compete with each other by service prices after…