Journal ArticleDOI
Ordered Consumer Search
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TLDR
In this article, the authors discuss situations in which consumers search through their options in a deliberate order, in contrast to more familiar models with random search, and show how ordered search can be reformulated as a simpler discrete choice problem without search frictions.Abstract:
The paper discusses situations in which consumers search through their options in a deliberate order, in contrast to more familiar models with random search. Topics include: network effects (consumers may be better off following the same search order as other consumers); the use of price and non-price advertising to direct search; the impact of consumers starting a new search with their previous supplier; the incentive sellers have to merge or co-locate with other sellers; and the incentive a seller can have to raise its own search cost. I also show how ordered search can be reformulated as a simpler discrete choice problem without search frictions.read more
Citations
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Journal ArticleDOI
Prices and heterogeneous search costs
TL;DR: In this paper, price formation in a model of consumer search for differentiated products in which consumers have heterogeneous search costs is studied and conditions under which a pure-strategy symmetric Nash equilibrium exists and is unique.
Journal ArticleDOI
Consumer Search and Prices in the Automobile Market
TL;DR: In this article, a discrete-choice model with optimal consumer search was developed to explain variability in purchase patterns in the automobile industry using macro-level data on prices, market shares, as well as data on dealership locations and consumer demographics.
Posted Content
Paying for prominence
Mark Armstrong,Jidong Zhou +1 more
TL;DR: In this article, the authors investigate three ways in which firms can become "prominent" and thereby influence the order in which consumers consider options, and they show that equilibrium prices are lower when search costs are higher since a firm's benefit from being investigated first increases with search costs.
Book ChapterDOI
Empirical search and consideration sets
TL;DR: An overview of the recent and growing econometric literature studying how consumers search for products, leading up to more recent work that combines the two approaches by formulating search as the process through which consumers form consideration sets.
Journal ArticleDOI
A Model of Directed Consumer Search
TL;DR: In this article, the authors present a framework to study directed consumer search and show that when consumers observe prices before search, prices and profits are lower than when they do not, and if prices are readily observable, firms also influence search direction by their choice of price.
References
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Journal ArticleDOI
Prominence and consumer search
TL;DR: In this article, the authors examine the implications of "prominence" in search markets and find that making a firm prominent will typically lead to higher industry profit but lower consumer surplus and welfare.
Journal ArticleDOI
On the Gittins Index for Multiarmed Bandits
TL;DR: In this article, the authors considered the multiarmed bandit problem and presented a new proof of the optimality of the Gittins index policy, which does not require an interchange argument.
ReportDOI
Position Auctions with Consumer Search
Susan Athey,Glenn Ellison +1 more
TL;DR: The authors examines a model in which advertisers bid for "sponsored-link" positions on a search engine and the value advertisers derive from each position is endogenized as coming from sales to a population of consumers who make rational inferences about rm qualities and search optimally.
Journal ArticleDOI
Bestseller lists and product variety
TL;DR: This article used detailed weekly data on sales of hardcover fiction books to evaluate the impact of the New York Times bestsellers list on sales and product variety, and found that appearing on the list leads to a modest increase in sales for the average book and that the effect is more dramatic for debut authors.
Posted Content
A Search Cost Model of Obfuscation
Glenn Ellison,Alexander Wolitzky +1 more
TL;DR: In this paper, the authors develop search-theoretic models in which it is individually rational for firms to engage in obfuscation, and examine patterns of obfuscation and show that higher markups are usually associated with more obfuscation.