Information design for selling search goods and the effect of competition

• 成果类型: Article
• 署名作者: Lyu, Chen
• 署名单位: Peking University Shenzhen Graduate School (PKU Shenzhen); Peking University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2023.105722
• 发表日期: 2023
• 关键词: Information design; Bayesian persuasion; Search goods; consumer search; COMPETITION

摘要

I study optimal information provision by a search goods seller. While the seller controls a consumer's pre-search information, he cannot control post-search information because the consumer will inevitably learn the product's match after search. A relaxed problem approach is developed to solve the optimal design, which accommodates both continuous value distributions and ex-ante heterogeneous consumers with privately known outside options. The optimal design is shown to crucially depend on the outside option value distribution, and can be implemented by a simple upper-censorship signal under certain regularity conditions. Several applications are provided, including comparing information designs for search goods and experience goods, and studying the effect of competition with a large number of sellers.(c) 2023 Elsevier Inc. All rights reserved.