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  • metasearch_11_02

    Rights statement: This is the author’s version of a work that was accepted for publication in International Journal of Industrial Organization. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in International Journal of Industrial Organization, 70, 2020 DOI: 10.1016/j.ijindorg.2020.102614

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Metasearch and market concentration

Research output: Contribution to Journal/MagazineJournal articlepeer-review

Published
Article number102614
<mark>Journal publication date</mark>1/05/2020
<mark>Journal</mark>International Journal of Industrial Organization
Volume70
Number of pages23
Publication StatusPublished
Early online date19/03/20
<mark>Original language</mark>English

Abstract

Competing intermediaries search on behalf of consumers among a large number of horizontally differentiated sellers. Consumers either pick the best deal offered by an intermediary, or compare the intermediaries. A higher number of intermediaries has the direct effect of decreasing their search effort. Hence, if an exogenous share of consumers do not compare, more competition hurts them. More competition however also increases the incentives for consumers to compare. A higher share of informed consumers in turn increases the search effort of intermediaries. If consumers are ex-ante identical and rationally choose whether to become informed, the total effect of a higher number of intermediaries is to make each of them (weakly) choosier. Moreover, it always decreases the price offered by sellers. Allowing intermediaries to bias their advice by making sponsored links prominent has a similar effect of making all consumers better off in expectation.

Bibliographic note

This is the author’s version of a work that was accepted for publication in International Journal of Industrial Organization. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in International Journal of Industrial Organization, 70, 2020 DOI: 10.1016/j.ijindorg.2020.102614