Search costs in concentrated markets: An experimental analysis

Arbeitspapier

This paper experimentally studies the role of search cost in duopoly markets where sellers may be able to coordinate pricing decisions. We vary the level of search cost and whether sellers can communicate. While we find that consumers are more likely to invest in search when cost is reduced, we find that a reduction of search cost does not influence prices. This effect is not influenced by the availability of seller communication. Our results suggest that policy interventions that aim to increase the competitiveness of markets via reducing search cost may not be effective in concentrated markets.

Object Details

• ISBN: 978-3-86304-232-5
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DICE Discussion Paper ; No. 233

Classification and Topics

• Classification: Wirtschaft ; Regulated Industries and Administrative Law ; Oligopoly and Other Imperfect Markets ; Economics of Regulation
• Subject: Search ; Collusion ; Regulation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Möllers, Claudia ; Stühmeier, Torben ; Wenzel, Tobias
• Event: Veröffentlichung
• (who): Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
• (where): Düsseldorf
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/147309
• Last update: 10.03.0310, 11:45 AM CET