Zhou, Jidong (2011): Multiproduct search.
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This paper presents a sequential search model where consumers look for several products among competitive multiproduct �rms. In a multiproduct search mar- ket, both consumer behavior and �rm behavior exhibit di¤erent features from the single-product case: a consumer often returns to previously visited �rms before running out of options; and prices can decrease with search costs and increase with the number of �rms. The framework is then extended in two directions. First, by introducing both single-product and multiproduct searchers, the model can explain the phenomenon of countercyclical pricing, i.e., prices of many retail products decline during peak-demand periods. Second, by allowing �rms to use bundling strategies, the model sheds new light on how bundling a¤ects market performance. In a search environment, bundling tends to reduce consumer search intensity, which can soften competition and reverse the usual welfare assessment of competitive bundling in a perfect information setting.
|Item Type:||MPRA Paper|
|Original Title:||Multiproduct search|
|Keywords:||consumer search, oligopoly, multiproduct pricing, countercyclical pricing, bundling|
|Subjects:||D - Microeconomics > D1 - Household Behavior and Family Economics > D11 - Consumer Economics: Theory
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
D - Microeconomics > D4 - Market Structure and Pricing > D43 - Oligopoly and Other Forms of Market Imperfection
|Depositing User:||Jidong Zhou|
|Date Deposited:||06. Mar 2012 16:37|
|Last Modified:||20. Feb 2013 08:41|
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