Attraction Via Prices and Information
arxiv(2024)
摘要
We study the ramifications of increased commitment power for information
provision in an oligopolistic market with search frictions. Although prices are
posted and, therefore, guide search, if firms cannot commit to information
provision policies, there is no active search at equilibrium so consumers visit
(and purchase from) at most one firm. If firms can guide search by both their
prices and information policies, there exists a unique symmetric equilibrium
exhibiting price dispersion and active search. Nevertheless, when the market is
thin, consumers prefer the former case, which features intense price
competition. Firms always prefer the latter.
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