INFORMATION ACQUISITION AND DIFFUSION IN MARKETS

• 成果类型: Article
• 署名作者: Atayev, Atabek; Janssen, Maarten
• 署名单位: University of Vienna
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12672
• 发表日期: 2024
• 页码: 729-753
• 关键词: word-of-mouth; mobile phones; search; COMMUNICATION; MODEL

摘要

Consumers acquire information through their own search efforts or through word-of-mouth communication within their social network. Information diffusion leads to free-riding and less active search. Free-riding consumers also create important positive externalities, however, as they are more likely to compare prices, imposing competitive pressure on firms. We show how market prices depend on network characteristics and search cost. For example, if search cost becomes small, price dispersion disappears, while prices converge to the monopoly level, with expected prices decreasing for small search cost. Prices are lower in societies with more connections, while price dispersion remains even in fully connected societies.