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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Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - Metasearch and market concentration
AU - Foucart, Renaud
N1 - 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
PY - 2020/5/1
Y1 - 2020/5/1
N2 - 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.
AB - 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.
KW - Search
KW - Advice
KW - Competition
U2 - 10.1016/j.ijindorg.2020.102614
DO - 10.1016/j.ijindorg.2020.102614
M3 - Journal article
VL - 70
JO - International Journal of Industrial Organization
JF - International Journal of Industrial Organization
SN - 0167-7187
M1 - 102614
ER -