The informational divide☆
Highlights
► A model of price competition where consumers exogenously differ in the number of prices they compare. ► More search for uninformed consumers has a positive price externality to all consumers. ► More search for partially informed consumers has a negative price externality to low informed consumers: this is the informational divide.
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Cited by (10)
Improving comparison shopping agents' competence through selective price disclosure
2015, Electronic Commerce Research and ApplicationsCitation Excerpt :Other works consider the buyer to be the CSA entity itself (Varian 1980, Stahl 1989, Janssen et al. 2005), i.e., the CSA uses the most cost-effective search strategy to minimize the buyer’s overall expense. Naturally, in such cases, the existence of CSAs improves the buyers’ performance, resulting in a lower benefit to sellers (Gorman et al. 2009, Nermuth et al. 2013). The few works that do assume that the CSAs are self-interested autonomous entities, as does our work, focus on CSAs that charge buyers for their services (Kephart et al. 2000, Kephart and Greenwald 2002) (rather than sellers as in today’s markets (Wan and Peng 2010).
The only Dance in Town: Unique Equilibrium in a Generalized Model of Price Competition*
2021, Journal of Industrial EconomicsLimits of price competition: cost asymmetry and imperfect information
2020, International Journal of Game TheoryHow increasing supplier search cost can increase welfare
2018, B.E. Journal of Theoretical EconomicsAsymmetric Price Effects of Competition
2017, Journal of Industrial Economics
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We are grateful to two referees and to the advisory editor for their useful suggestions. The authors wish to thank Larry Blume, Giacomo Calzolari, Andrea Galeotti, Maarten Janssen, Saul Lach, Marco van der Leij, José Luis Moraga-González, Marco Ottaviani, Mario Padula, and Fernando Vega-Redondo for useful comments on earlier drafts of this paper. Previous versions of this paper were circulated under the titles “Price Dispersion, Search Externalities, and the Digital Divide” and “A Network Model of Price Dispersion.”