DocumentCode :
1803788
Title :
Equilibrium Price Dispersion with Online Search
Author :
Xu, Lizhen ; Chen, Jianqing ; Whinston, Andrew
Author_Institution :
McCombs Sch. of Bus., Univ. of Texas at Austin, Austin, TX, USA
fYear :
2010
fDate :
5-8 Jan. 2010
Firstpage :
1
Lastpage :
11
Abstract :
This paper studies how consumers´ online search behavior may trigger pervasive and persistent online price dispersion. We set up a game-theoretic model to examine the oligopolistic price competition, given the two unique features of online search, namely, the existence of a common search ordering and shoppers who have non-positive search cost. We show that in absence of further heterogeneity, the unique online search behaviors alone can drive significant level of price dispersion. Specifically, we derive two-dimensional price dispersion, with both temporal fluctuation and spatial variation. We show that equilibrium price expectation monotonically decreases in line with consumers´ search ordering. We also uncover a unique format of equilibrium pricing with stair-like sequence of price supports and localized price competition.
Keywords :
Internet; consumer behaviour; game theory; oligopoly; order processing; pricing; consumer online search; consumer search ordering; equilibrium price dispersion; game theory; localized price competition; oligopolistic price competition; persistent online price dispersion; pervasive online price dispersion; shoppers; Advertising; Costs; Drives; Electronic commerce; Information technology; Internet; Mice; Production; Search engines; Space technology;
fLanguage :
English
Publisher :
ieee
Conference_Titel :
System Sciences (HICSS), 2010 43rd Hawaii International Conference on
Conference_Location :
Honolulu, HI
ISSN :
1530-1605
Print_ISBN :
978-1-4244-5509-6
Electronic_ISBN :
1530-1605
Type :
conf
DOI :
10.1109/HICSS.2010.187
Filename :
5428559
Link To Document :
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