Competitive Information Disclosure in Search Markets

Buyers often search across sellers to learn which product best fits their needs. We study how sellers manage these search incentives through their disclosure strategies (e.g., product trials, reviews, and recommendations) and ask how competition affects information provision. If sellers can observe...

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Published in:The Journal of political economy 2018-10, Vol.126 (5), p.1965-2010
Main Authors: Board, Simon, Lu, Jay
Format: Article
Language:English
Subjects:
Buyers
Coordination
Disclosure
Economic theory
Equilibrium
Incentives
Information sharing
Information sources
Markets
Monopolies
Political economy
Product reviews
Search strategies
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cited_by cdi_FETCH-LOGICAL-c367t-b57fc0a291847abb06fa00a4c33be89ac300dc9d0a0da9daf13d4bbe0bef80733
cites cdi_FETCH-LOGICAL-c367t-b57fc0a291847abb06fa00a4c33be89ac300dc9d0a0da9daf13d4bbe0bef80733
container_end_page 2010
container_issue 5
container_start_page 1965
container_title The Journal of political economy
container_volume 126
creator Board, Simon
Lu, Jay
description Buyers often search across sellers to learn which product best fits their needs. We study how sellers manage these search incentives through their disclosure strategies (e.g., product trials, reviews, and recommendations) and ask how competition affects information provision. If sellers can observe the beliefs of buyers or can coordinate their strategies, then there is an equilibrium in which sellers provide the “monopoly level” of information. In contrast, if buyers’ beliefs are private, then there is an equilibrium in which sellers provide full information as search costs vanish. Anonymity and coordination thus play important roles in understanding how advice markets work.
doi_str_mv 10.1086/699211
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source EconLit s plnými texty; International Bibliography of the Social Sciences (IBSS); Business Source Ultimate【Trial: -2024/12/31】【Remote access available】; JSTOR Archival Journals and Primary Sources Collection; University of Chicago Press Journals
subjects Buyers
Coordination
Disclosure
Economic theory
Equilibrium
Incentives
Information sharing
Information sources
Markets
Monopolies
Political economy
Product reviews
Search strategies
title Competitive Information Disclosure in Search Markets
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