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Search and Obfuscation in a Technologically Changing Retail Environment: Some Thoughts on Implications and Policy

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  • Glenn Ellison
  • Sara Fisher Ellison

Abstract

Technologies, especially the Internet, have transformed how consumers search for products and prices. Price search has become cheap and easy and, therefore, ubiquitous, for many products. Just as technologies have made price search easier, however, they have increased incentives that firms have to obfuscate, or make price search harder. In this article, we focus on these actions that firms take and their effects on market participants. We discuss empirical evidence on this phenomenon, as well as its welfare impacts in the context of theories of search and obfuscation. Finally, we offer a framework for thinking about policy interventions based on this welfare analysis and outline some of the challenges facing policymakers.

Suggested Citation

  • Glenn Ellison & Sara Fisher Ellison, 2018. "Search and Obfuscation in a Technologically Changing Retail Environment: Some Thoughts on Implications and Policy," Innovation Policy and the Economy, University of Chicago Press, vol. 18(1), pages 1-25.
    • Handle: RePEc:ucp:ipolec:doi:10.1086/694405
    DOI: 10.1086/694405
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    Cited by:

    1. José Manuel Ordóñez-de-Haro & Jordi Perdiguero & Juan-Luis Jiménez, 2020. "Fuel prices at petrol stations in touristic cities," Tourism Economics, , vol. 26(1), pages 45-69, February.
    2. Franz Hackl & Michael Hölzl‐Leitner & Rudolf Winter‐Ebmer & Christine Zulehner, 2021. "Successful retailer strategies in price comparison platforms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(5), pages 1284-1305, July.
    3. Ernst Fehr & Keyu Wu, 2021. "Obfuscation in competitive markets," ECON - Working Papers 391, Department of Economics - University of Zurich, revised Feb 2023.
    4. Rhodes, Andrew, 2023. "A Survey on Drip Pricing and Other False Advertising," TSE Working Papers 23-1434, Toulouse School of Economics (TSE).
    5. Hämäläinen, Saara, 2018. "Competitive search obfuscation," Journal of Economic Dynamics and Control, Elsevier, vol. 97(C), pages 38-63.
    6. Franz Hackl & Michael Hölzl-Leitner & Rudolf Winter-Ebmer & Christine Zulehner, 2018. "Success of firm strategies in e-commerce," Economics working papers 2018-10, Department of Economics, Johannes Kepler University Linz, Austria.

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