SIMULTANEOUS SEARCH FOR DIFFERENTIATED PRODUCTS: THE IMPACT OF SEARCH COSTS AND FIRM PROMINENCE

• 成果类型: Article
• 署名作者: Moraga-Gonzalez, Jose L.; Sandor, Zsolt; Wildenbeest, Matthijs R.
• 署名单位: Vrije Universiteit Amsterdam; University of Groningen; Sapientia Hungarian University of Transylvania; Indiana University System; IU Kelley School of Business; Indiana University Bloomington
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1093/ej/ueaa075
• 发表日期: 2021
• 页码: 1308-1330
• 关键词: consumer search; equilibrium; probability; COMPETITION; prices; MODEL

摘要

We extend the literature on simultaneous search by allowing for differentiated products and search cost heterogeneity. We show conditions under which a symmetric price equilibrium exists. We provide a necessary and sufficient condition under which an increase in search costs may result in a lower, equal or higher equilibrium price. We extend this analysis to the case with more than two firms. The effects of prominence on equilibrium prices are also studied. The prominent firm charges a higher price than the non-prominent firm and both their prices are below the symmetric equilibrium price. Consequently, market prominence increases the consumers' surplus.