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Ordered search with asymmetric product design

Author

Listed:
  • Hui Song

    (Shandong University
    Shandong University)

Abstract

Two firms sell horizontally differentiated products on a platform; one product has generic design, whereas the other has polarized design. Consumers search sequentially for products and prices. We show that there always exists an equilibrium where firms correctly expect consumers to first search the product with polarized design. If the platform is able to choose a search order for consumers, generally it lets consumers search the product with polarized design first. The polarized–generic ordering can be achieved using a generalized English auction when product designs cannot be observed by the platform.

Suggested Citation

  • Hui Song, 2017. "Ordered search with asymmetric product design," Journal of Economics, Springer, vol. 121(2), pages 105-132, June.
    • Handle: RePEc:kap:jeczfn:v:121:y:2017:i:2:d:10.1007_s00712-016-0518-0
    DOI: 10.1007/s00712-016-0518-0
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    References listed on IDEAS

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    Cited by:

    1. Oksana Loginova & Andrea Mantovani, 2019. "Price competition in the presence of a web aggregator," Journal of Economics, Springer, vol. 126(1), pages 43-73, January.
    2. Max Riegel, 2024. "Vertical Differentiation Through Product Design," CRC TR 224 Discussion Paper Series crctr224_2024_556, University of Bonn and University of Mannheim, Germany.
    3. Riegel, Max, 2023. "Vertical Differentiation through Product Design," MPRA Paper 119384, University Library of Munich, Germany.

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    More about this item

    Keywords

    Ordered search; Product differentiation; Taste heterogeneity;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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