Simultaneous search for differentiated products: The impact of search costs and firm prominence

José Moraga González*, Zsolt Sandor, Matthijs R. Wildenbeest

*Bijbehorende auteur voor dit werk

OnderzoeksoutputAcademicpeer review

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Samenvatting

We extend the literature on simultaneous search by allowing for differentiated products and search cost heterogeneity. We show conditions under which a symmetric price equilibrium exists. We provide a necessary and sufficient condition under which an increase in search costs may result in a lower, equal or higher equilibrium price. We extend this analysis to the case with more than two firms. The effects of prominence on equilibrium prices are also studied. The prominent firm charges a higher price than the non-prominent firm and both their prices are below the symmetric equilibrium price. Consequently, market prominence increases the consumers’ surplus.
Originele taal-2English
Pagina's (van-tot)1308-1330
Aantal pagina's23
TijdschriftEconomic Journal
Volume131
Nummer van het tijdschrift635
DOI's
StatusPublished - apr-2021

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