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Competition in search markets with naive consumers

Gamp, Tobias; Krähmer, Daniel - 2022

We study the interplay between quality provision and consumer search in a search market where firms may design products of inferior quality to promote them to naive consumers who fail to fully understand product characteristics. We derive an equilibrium in which both superior and inferior...

Persistent link: https://www.econbiz.de/10014476771

Privacy and platform competition

Dimakopoulos, Philipp; Sudaric, Slobodan - 2018

We analyze platform competition where user data is collected to improve adtargeting. Considering that users incur … overall competition is weak or if targeting benefits are low, too much private data is collected, and vice-versa. Further, we … find that softer competition on either market side leads to more data collection, which implies substitutability between …

Persistent link: https://www.econbiz.de/10011897071

Biased beliefs in search markets

Gamp, Tobias; Krähmer, Daniel - 2022

We study the implications of biased consumer beliefs for search market outcomes in the seminal framework due to Diamond (1971). Biased consumers base their search strategy on a belief function which specifies for any (true) distribution of utility offers in the market a possibly incorrect...

Persistent link: https://www.econbiz.de/10014476790

Self-preferencing, quality provision, and welfare in mobile application markets

Teng, Xuan - 2023

Platforms often display their products ahead of third-party products in search. Is this due to consumers preferring platform-owned products or platforms engaging in self-preferencing by biasing search towards their own products? What are the welfare implications? I develop a structural model of...

Persistent link: https://www.econbiz.de/10014495178

All-pay competition with captive consumers

Foucart, Renaud; Friedrichsen, Jana - 2021

consumer surplus. We relate our findings to competition cases in digital markets. …

Persistent link: https://www.econbiz.de/10012500215

Persuasion against self-control problems

Wangenheim, Jonas von - 2018

I derive a social planner's optimal information design in an environment with quasi-hyperbolic discounting consumers without commitment. Consumption induces instantaneous utility, but unknown delayed cost. Consumers may or may not acquire additional costless information on the cost parameter....

Persistent link: https://www.econbiz.de/10011902726

Consumer exploitation and notice periods

Murooka, Takeshi; Schwarz, Marco - 2018

Firms often set long notice periods when consumers cancel a contract, and sometimes do so even when the costs of changing or canceling the contract are small. We investigate a model in which a firm offers a contract to consumers who may procrastinate canceling it due to naive present-bias. We...

Persistent link: https://www.econbiz.de/10011905152

The timing of choice-enhancing policies

Murooka, Takeshi; Schwarz, Marco - 2017

Recent studies investigate policies motivating consumers to make an active choice as a way to protect unsophisticated consumers. We analyze the optimal timing of such choice-enhancing policies when a firm can strategically react to them. In our model, a firm provides a contract with automatic...

Persistent link: https://www.econbiz.de/10011762539

Transparent app design reduces excessive usage time and increases willingness to pay compared to common behavioral design - a framed field experiment

Timko, Christina; Adena, Maja - 2023

Smartphone app designers often use behavioral design to influence users, increase sales, and boost advertising revenue. Behavioral design relies on elements ranging from app appearance to black-box algorithms and personalization. It commonly exploits behavioral biases, such as the lack of...

Persistent link: https://www.econbiz.de/10014294136

Time pressure and regret in sequential search

Klimm, Felix; Kocher, Martin; Opitz, Timm; Schudy, Simeon - 2022

Perceived urgency and regret are common in many sequential search processes; for example, sellers often pressure buyers in search of the best offer, both time-wise and in terms of potential regret of forgoing unique purchasing opportunities. theoretically, these strategies result in anticipated...

Persistent link: https://www.econbiz.de/10014476728

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