Reducing buyer search costs: implications for electronic marketplaces
Management Science - Special issue: Frontier research on information systems and economics
Price Promotions and Trade Deals with Multiproduct Retailers
Management Science
When and How is the Internet Likely to Decrease Price Competition?
Marketing Science
Frictionless Commerce? A Comparison of Internet and Conventional Retailers
Management Science
Internet Shopping Agents: Virtual Co-Location and Competition
Marketing Science
Consumer Sequential Search: Not Enough or Too Much?
Marketing Science
Implications of Reduced Search Cost and Free Riding in E-Commerce
Marketing Science
Modeling Browsing Behavior at Multiple Websites
Marketing Science
Partial-Repeat-Bidding in the Name-Your-Own-Price Channel
Marketing Science
Marketing Science
Marketing and Designing Transaction Games
Marketing Science
Product Variety and Endogenous Pricing with Evaluation Costs
Management Science
When More Alternatives Lead to Less Choice
Marketing Science
Strategic Entry Before Demand Takes Off
Management Science
Seller Search and Market Outcomes in Online Auctions
Management Science
The Benefits of Competitive Upward Channel Decentralization
Management Science
Using Transaction Prices to Re-Examine Price Dispersion in Electronic Markets
Information Systems Research
Optimal Search for Product Information
Management Science
Competition in Consumer Shopping Experience
Marketing Science
Consumer Fit Search, Retailer Shelf Layout, and Channel Interaction
Marketing Science
| Hi-index | 0.00 |
Buyer search costs for price are changing in many markets. Through a model of buyer and seller behavior, I consider the effects of changing search costs on prices both when product differentiation is fixed and when it is endogenously determined in equilibrium. If firms cannot change product design, lower buyer search costs for price lead to increased price competition. However, if product design is a decision variable, lower search costs for price may also lead to higher product differentiation, which decreases price competition. In this case, the overall effect of lower buyer search costs for price may even be higher prices, lower social welfare, and higher industry profits. The result is especially interesting because recent technological changes, such as Internet shopping, can affect the market structure through lowering buyer search costs.