Information Gatekeepers on the Internet and the Competitiveness of Homogeneous Product Markets

@article{Baye_01_InformationGatekeepers, abstract = {We examine the equilibrium interaction between a market for price information (controlled by a gatekeeper) and the homogenous product market it serves. The gatekeeper charges fees to firms that advertise prices on its Internet site and to consumers who access the list of advertised prices. Gatekeeper profits are maximized in an equilibrium where (a) the product market exhibits price dispersion; (b) access fees are sufficiently low that all consumers subscribe; (c) advertising fees exceed socially optimal levels, thus inducing partial firm participation; and (d) advertised prices are below unadvertised prices. Introducing the market for information has ambiguous social welfare effects.}, author = {Baye, Michael R. and Morgan, John}, citeulike-article-id = {3210448}, doi = {10.2307/2677873}, issn = {00028282}, journal = {The American Economic Review}, keywords = {advertising, competition, io, market, network\_externality, oligopoly, paper\_02\_search\_engine\_competition, prices, product\_differentiation, search\_engines, two\_sided}, number = {3}, pages = {454--474}, posted-at = {2008-09-09 16:44:15}, priority = {4}, publisher = {American Economic Association}, title = {Information Gatekeepers on the Internet and the Competitiveness of Homogeneous Product Markets}, url = {http://dx.doi.org/10.2307/2677873}, volume = {91}, year = {2001} }

TY - JOUR ID - Baye_01_InformationGatekeepers L3 - citeulike-article-id:3210448 N2 - We examine the equilibrium interaction between a market for price information (controlled by a gatekeeper) and the homogenous product market it serves. The gatekeeper charges fees to firms that advertise prices on its Internet site and to consumers who access the list of advertised prices. Gatekeeper profits are maximized in an equilibrium where (a) the product market exhibits price dispersion; (b) access fees are sufficiently low that all consumers subscribe; (c) advertising fees exceed socially optimal levels, thus inducing partial firm participation; and (d) advertised prices are below unadvertised prices. Introducing the market for information has ambiguous social welfare effects. IS - 3 JF - The American Economic Review SN - 00028282 EP - 474 TI - Information Gatekeepers on the Internet and the Competitiveness of Homogeneous Product Markets PB - American Economic Association VL - 91 SP - 454 KW - advertising KW - competition KW - io KW - market KW - network_externality KW - oligopoly KW - paper_02_search_engine_competition KW - prices KW - product_differentiation KW - search_engines KW - two_sided AU - Baye, Michael AU - Morgan, John PY - 2001/// UR - http://dx.doi.org/10.2307/2677873 ER -