Document Type
Discussion Paper
Publication Date
10-15-2020
CFDP Number
2264
CFDP Pages
26
Journal of Economic Literature (JEL) Code(s)
D43, D83, L13
Abstract
This paper studies how an improved information environment affects consumer search and firm competition. We find conditions for information improvement to have unambiguous impacts on search duration, price and consumer welfare. In many cases consumers benefit from information improvement regardless of how it affects the market price, but there are also cases where information improvement raises price significantly so that consumers suffer from it. Our model provides a unified way to consider the market implications of various types of information improvement such as search advertising, personalized recommendations, filtering, and VR shopping technology.
Recommended Citation
Zhou, Jidong, "Improved Information in Search Markets" (2020). Cowles Foundation Discussion Papers. 2580.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/2580