In many markets, firms offering low-quality goods are more prominent than firms offering high-quality goods. Then, consumers are perfectly informed about the good of the prominent low-quality firm but incur search costs to bring the high-quality good of a competitor to mind. We analyze under...

Within a one-shot, duopoly game, we show that firms cannot use false in-store price comparisons to deter rational consumers from further beneficial price search in an effort to create market power. However, by introducing a consumer protection authority that monitors price comparisons, we...

We study the estimation of preference heterogeneity in markets where consumers engage in costly search to learn product characteristics. Costly search amplifies the way consumer preferences translate into purchase probabilities, generating a seemingly large degree of preference heterogeneity. We...

Do consumers search the brands they know more or less frequently than the brands they are unfamiliar with? In this paper, we attempt to answer this question using data from an experiment with two novel features: (i) survey information on consumers’ prior brand ownership, familiarity with each...

Beyond real functional differences, brand positioning can have profound effects on the purchase decisions of consumers. Using a product-portfolio and consumer search framework, we provide a micro-foundation for why and how brand positioning can deliver credible information to consumers....

Trademarks are indeed about information, but trademark doctrine misunderstands trademarks’ information function. Trademark doctrine takes a broadcast view in a networked world. Rather than a world where a single source transmits messages to a passive public, we live in a world where many...

A large product assortment is typically characterized by many products that are rarely purchased: the long tail. Combined, these products make a sizable contribution to the total purchase volume. A retailer that better understands the purchase behavior in its long tail can increase the value of...

Our study examines the impact of both a demand side factor (online user reviews) and a supply side factor (product variety) on the long tail and superstar phenomena in the context of online software downloading. The descriptive analysis suggests a significant superstar download pattern and also...