
doi: 10.2139/ssrn.4676775
handle: 10419/282544
This paper studies a model of search engine competition with endogenous obfuscation. Platforms may differ in the quality of their search algorithms. I study the impact of this heterogeneity in consumer surplus, seller profits and platform revenue. I show that the dominant platform will typically induce higher prices but that consumers may benefit from asymmetries. I also show that enabling sellers to price-discriminate across platforms is pro-competitive. I then embed the static model in a dynamic setup, whereby past market shares lead to a better search algorithm. The dynamic consideration is pro-competitive but initial asymmetries are persistent.
L13, D83, ddc:330, platform competition, consumer search, M37, search engine, D43
L13, D83, ddc:330, platform competition, consumer search, M37, search engine, D43
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