Journal of Economic Literature (JEL) Code(s)
D43, D83, L13
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.
Zhou, Jidong, "Improved Information in Search Markets" (2020). Cowles Foundation Discussion Papers. 2580.