Uncertain product availability in search markets

DOI10.1016/J.JET.2022.105524MaRDI QIDQ2675426zbMATH OpenOpenAlexFDO

Authors Atabek Atayev

Publication date 23 September 2022

Published in Journal of Economic Theory (Search for Journal in Brave)

Copyright license Creative Commons Attribution 4.0 International

Full work available at URL https://arxiv.org/abs/2109.15211

zbMATH Keywords

consumer searchinformation asymmetryuncertain product availability

Mathematics Subject Classification ID

Auctions, bargaining, bidding and selling, and other market models (91B26) Consumer behavior, demand theory (91B42)

Abstract: In many markets buyers are poorly informed about which firms sell the product (product availability) and prices, and therefore have to spend time to obtain this information. In contrast, sellers typically have a better idea about which rivals offer the product. Information asymmetry between buyers and sellers on product availability, rather than just prices, has not been scrutinized in the literature on consumer search. We propose a theoretical model that incorporates this kind of information asymmetry into a simultaneous search model. Our key finding is that greater product availability may harm buyers by mitigating their willingness to search and, thus, softening competition.

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Cited in

(1)

• Informational asymmetries and observational learning in search

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